DB:GAH

Stock Analysis Report

Arthur J. Gallagher

Executive Summary

Arthur J. Gallagher & Co., together with its subsidiaries, provides insurance brokerage, consulting, and third party claims settlement and administration services in the United States, Australia, Bermuda, Canada, the Caribbean, New Zealand, and the United Kingdom.


Snowflake Analysis

Established dividend payer with acceptable track record.


Similar Companies

Share Price & News

How has Arthur J. Gallagher's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: GAH has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.0%

GAH

-1.2%

DE Insurance

-0.9%

DE Market


1 Year Return

37.6%

GAH

26.0%

DE Insurance

12.8%

DE Market

Return vs Industry: GAH exceeded the German Insurance industry which returned 26% over the past year.

Return vs Market: GAH exceeded the German Market which returned 12.8% over the past year.


Shareholder returns

GAHIndustryMarket
7 Day-2.0%-1.2%-0.9%
30 Day12.0%4.4%0.6%
90 Day18.8%7.2%2.9%
1 Year40.3%37.6%31.6%26.0%16.3%12.8%
3 Year97.3%84.1%66.8%46.7%15.8%5.7%
5 Year171.3%136.9%97.8%58.3%19.7%3.3%

Price Volatility Vs. Market

How volatile is Arthur J. Gallagher's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Arthur J. Gallagher undervalued compared to its fair value and its price relative to the market?

10.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: GAH (€98) is trading below our estimate of fair value (€109.41)

Significantly Below Fair Value: GAH is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: GAH is poor value based on its PE Ratio (30x) compared to the Insurance industry average (12.6x).

PE vs Market: GAH is poor value based on its PE Ratio (30x) compared to the German market (20.8x).


Price to Earnings Growth Ratio

PEG Ratio: GAH is poor value based on its PEG Ratio (2.2x)


Price to Book Ratio

PB vs Industry: GAH is overvalued based on its PB Ratio (3.9x) compared to the DE Insurance industry average (1.2x).


Next Steps

Future Growth

How is Arthur J. Gallagher forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

13.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: GAH's forecast earnings growth (13.6% per year) is above the savings rate (-0.4%).

Earnings vs Market: GAH's earnings (13.6% per year) are forecast to grow faster than the German market (13% per year).

High Growth Earnings: GAH's earnings are forecast to grow, but not significantly.

Revenue vs Market: GAH's revenue (4.4% per year) is forecast to grow slower than the German market (5.2% per year).

High Growth Revenue: GAH's revenue (4.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: GAH's Return on Equity is forecast to be low in 3 years time (10.7%).


Next Steps

Past Performance

How has Arthur J. Gallagher performed over the past 5 years?

17.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: GAH has high quality earnings.

Growing Profit Margin: GAH's current net profit margins (9.7%) are higher than last year (9.4%).


Past Earnings Growth Analysis

Earnings Trend: GAH's earnings have grown by 17.8% per year over the past 5 years.

Accelerating Growth: GAH's earnings growth over the past year (5.6%) is below its 5-year average (17.8% per year).

Earnings vs Industry: GAH earnings growth over the past year (5.6%) underperformed the Insurance industry 7%.


Return on Equity

High ROE: GAH's Return on Equity (13.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Arthur J. Gallagher's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: GAH has a low level of unsold assets or inventory.

Debt Coverage by Assets: GAH's debt is covered by short term assets (assets are 2x debt).


Financial Institutions Analysis

Asset Level: GAH's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if GAH has a sufficient allowance for bad loans.

Low Risk Liabilities: GAH reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if GAH has an acceptable proportion of non-loan assets held.

Low Risk Deposits: GAH has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if GAH has an appropriate level of bad loans.


Next Steps

Dividend

What is Arthur J. Gallagher's current dividend yield, its reliability and sustainability?

1.67%

Current Dividend Yield


Upcoming Dividend Payment

TodayFeb 23 2020Ex Dividend DateMar 05 2020Dividend Pay DateMar 20 202015 days from Ex DividendBuy in the next 10 days to receive upcoming dividend

Dividend Yield vs Market

Notable Dividend: GAH's dividend (1.67%) is higher than the bottom 25% of dividend payers in the German market (1.31%).

High Dividend: GAH's dividend (1.67%) is low compared to the top 25% of dividend payers in the German market (3.63%).


Stability and Growth of Payments

Stable Dividend: GAH's dividends per share have been stable in the past 10 years.

Growing Dividend: GAH's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (47.8%), GAH's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: GAH's dividends in 3 years are forecast to be well covered by earnings (39.4% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

11.6yrs

Average management tenure


CEO

Pat Gallagher (67yo)

25.1yrs

Tenure

Mr. J. Patrick Gallagher, Jr. also known as Pat, serves as the Chief Executive Officer and President of Gallagher Koster (alternate name, Koster Insurance Agency, Inc.) and VEBA Service Group, LLC. Mr. Gal ...


CEO Compensation Analysis

Compensation vs Market: Pat's total compensation ($USD0.00) is below average for companies of similar size in the German market ($USD4.38M).

Compensation vs Earnings: Pat's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Douglas Howell
Corporate VP & Chief Financial Officer16.8yrsUS$4.19m0.024% $4.5m
Walter Bay
Corporate VP13.1yrsUS$3.11m0.0076% $1.4m
Thomas Gallagher
Corporate VP and President of Global Property & Casualty Brokerage3.1yrsUS$4.51m0.23% $42.1m
Scott Hudson
Corporate VP & President of Risk Management Operation10.1yrsUS$3.18m0.013% $2.5m
Patrick Gallagher
Chairman of Canada0yrsUS$8.06mno data
J. Gallagher
Chairman25.1yrsno data0.44% $82.0m
David Long
Vice President0yrsno datano data
Richard Cary
Chief Accounting Officer0yrsno data0.018% $3.3m
Sean Connelly
Global Chief Information Officer and Corporate Vice President4.8yrsno datano data
Raymond Iardella
Vice President of Investor Relations4.1yrsno datano data

11.6yrs

Average Tenure

57yo

Average Age

Experienced Management: GAH's management team is seasoned and experienced (11.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
J. Gallagher
Chairman25.1yrsno data0.44% $82.0m
Richard Cary
Chief Accounting Officer0yrsno data0.018% $3.3m
Sherry Barrat
Independent Director6.6yrsUS$260.41k0.0091% $1.7m
David Coldman
Independent Director5.3yrsUS$240.41k0.0043% $794.2k
David Johnson
Lead Director4.1yrsUS$270.41k0.026% $4.8m
Kay McCurdy
Independent Director14.3yrsUS$255.41k0.016% $3.0m
William Bax
Independent Director13.3yrsUS$265.41k0.022% $4.0m
Norman Rosenthal
Independent Director12.1yrsUS$240.41k0.017% $3.2m
Frank English
Independent Director10.8yrsUS$240.41k0.0038% $710.1k
David Jack
Chairman of Technical Advisory Board4.3yrsno datano data

10.8yrs

Average Tenure

68yo

Average Age

Experienced Board: GAH's board of directors are seasoned and experienced ( 10.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Arthur J. Gallagher & Co.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Arthur J. Gallagher & Co.
  • Ticker: GAH
  • Exchange: DB
  • Founded: 1927
  • Industry: Insurance Brokers
  • Sector: Insurance
  • Market Cap: US$20.299b
  • Listing Market Cap: US$18.687b
  • Shares outstanding: 188.25m
  • Website: https://www.ajg.com

Number of Employees


Location

  • Arthur J. Gallagher & Co.
  • 2850 Golf Road
  • Rolling Meadows
  • Illinois
  • 60008
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
AJGNYSE (New York Stock Exchange)YesCommon StockUSUSDJun 1984
GAHDB (Deutsche Boerse AG)YesCommon StockDEEURJun 1984
0ITLLSE (London Stock Exchange)YesCommon StockGBUSDJun 1984
AJG *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJun 1984
A1JG34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 2 REPR 1 COMBRBRLJan 2020

Biography

Arthur J. Gallagher & Co., together with its subsidiaries, provides insurance brokerage, consulting, and third party claims settlement and administration services in the United States, Australia, Bermuda, Canada, the Caribbean, New Zealand, and the United Kingdom. Its Brokerage segment consists of retail and wholesale insurance brokerage operations. It offers brokerage and consulting services to businesses and organizations, including commercial, not-for-profit, and public entities, as well as individuals in the areas of insurance placement, risk of loss management, and management of employer sponsored benefit programs. This segment also assist retail brokers and other non-affiliated brokers in the placement of specialized and hard-to-place insurance; acts as a brokerage wholesaler, and managing general agent or managing general underwriter distributing specialized insurance coverage's for underwriting enterprises; and performs activities, including marketing, underwriting, issuing policies, collecting premiums, appointing and supervising other agents, paying claims, and negotiating reinsurance. The company’s Risk Management segment provides contract claim settlement and administration services for enterprises and public entities; and claims management, loss control consulting, and insurance property appraisal services. The company offers its services through a network of correspondent insurance brokers and consultants. It serves commercial, industrial, public entity, religious, and not-for-profit entities. Arthur J. Gallagher & Co. was founded in 1927 and is headquartered in Rolling Meadows, Illinois. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/23 22:32
End of Day Share Price2020/02/21 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.