Arthur J. Gallagher & Co., together with its subsidiaries, provides insurance brokerage, consulting, third-party claims settlement, and administration services in the United States, Australia, Bermuda, Canada, the Caribbean, New Zealand, India, and the United Kingdom.
Arthur J. Gallagher & Co., together with its subsidiaries, provides insurance brokerage, consulting, third-party claims settlement, and administration services in the United States, Australia, Bermuda, Canada, the Caribbean, New Zealand, India, and the United Kingdom. It operates through Brokerage and Risk Management segments. The Brokerage segment consists of retail and wholesale insurance brokerage operations; assists retail brokers and other non-affiliated brokers in the placement of specialized and hard-to-place insurance; acts as a brokerage wholesaler, managing general agent, and managing general underwriter for distributing specialized insurance coverage's to underwriting enterprises.
Arthur J. Gallagher Fundamentals Summary
How do Arthur J. Gallagher's earnings and revenue compare to its market cap?
Is Arthur J. Gallagher undervalued compared to its fair value and its price relative to the market?
Valuation Score
2/6
Valuation Score 2/6
Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry
23.4%
Undervalued compared to fair value
Share Price vs. Fair Value
Below Fair Value: AJG ($157.49) is trading below our estimate of fair value ($205.53)
Significantly Below Fair Value: AJG is trading below fair value by more than 20%.
Price To Earnings Ratio
PE vs Industry: AJG is poor value based on its Price-To-Earnings Ratio (34.3x) compared to the US Insurance industry average (11.1x).
PE vs Market: AJG is poor value based on its Price-To-Earnings Ratio (34.3x) compared to the US market (14.9x).
Price to Earnings Growth Ratio
PEG Ratio: AJG is poor value based on its PEG Ratio (1.4x)
Price to Book Ratio
PB vs Industry: AJG is overvalued based on its Price-To-Book Ratio (3.7x) compared to the US Insurance industry average (1x).
Future Growth
How is Arthur J. Gallagher forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?
Future Growth Score
4/6
Future Growth Score 4/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE
25.4%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: AJG's forecast earnings growth (25.4% per year) is above the savings rate (1.9%).
Earnings vs Market: AJG's earnings (25.4% per year) are forecast to grow faster than the US market (12.1% per year).
High Growth Earnings: earnings are expected to grow significantly over the next 3 years.
Revenue vs Market: AJG's revenue (10% per year) is forecast to grow faster than the US market (7.7% per year).
High Growth Revenue: AJG's revenue (10% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: AJG's Return on Equity is forecast to be low in 3 years time (17.4%).
Past Performance
How has Arthur J. Gallagher performed over the past 5 years?
Past Performance Score
2/6
Past Performance Score 2/6
Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE
13.1%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: AJG has a large one-off loss of $327.7M impacting its March 31 2022 financial results.
Growing Profit Margin: AJG's current net profit margins (11.7%) are lower than last year (12.1%).
Past Earnings Growth Analysis
Earnings Trend: AJG's earnings have grown by 13.1% per year over the past 5 years.
Accelerating Growth: AJG's earnings growth over the past year (12.7%) is below its 5-year average (13.1% per year).
Earnings vs Industry: AJG earnings growth over the past year (12.7%) exceeded the Insurance industry -2.6%.
Return on Equity
High ROE: AJG's Return on Equity (11.1%) is considered low.
Financial Health
How is Arthur J. Gallagher's financial position?
Financial Health Score
5/6
Financial Health Score 5/6
Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage
Financial Position Analysis
Short Term Liabilities: AJG's short term assets ($27.5B) exceed its short term liabilities ($26.1B).
Long Term Liabilities: AJG's short term assets ($27.5B) exceed its long term liabilities ($8.0B).
Debt to Equity History and Analysis
Debt Level: AJG's net debt to equity ratio (62.5%) is considered high.
Reducing Debt: AJG's debt to equity ratio has reduced from 79% to 68.4% over the past 5 years.
Debt Coverage: AJG's debt is well covered by operating cash flow (31%).
Interest Coverage: AJG's interest payments on its debt are well covered by EBIT (10.1x coverage).
Balance Sheet
Dividend
What is Arthur J. Gallagher current dividend yield, its reliability and sustainability?
Dividend Score
4/6
Dividend Score 4/6
Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage
1.30%
Current Dividend Yield
Upcoming Dividend Payment
Dividend Yield vs Market
Notable Dividend: AJG's dividend (1.3%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.57%).
High Dividend: AJG's dividend (1.3%) is low compared to the top 25% of dividend payers in the US market (4.06%).
Stability and Growth of Payments
Stable Dividend: AJG's dividends per share have been stable in the past 10 years.
Growing Dividend: AJG's dividend payments have increased over the past 10 years.
Earnings Payout to Shareholders
Earnings Coverage: With its reasonably low payout ratio (41.8%), AJG's dividend payments are well covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: With its low cash payout ratio (24.1%), AJG's dividend payments are well covered by cash flows.
Discover strong dividend paying companies
Management
How experienced are the management team and are they aligned to shareholders interests?
13.7yrs
Average management tenure
CEO
Pat Gallagher (69 yo)
32.33yrs
Tenure
US$13,882,255
Compensation
Mr. J. Patrick Gallagher, Jr. also known as Pat, serves as the Chief Executive Officer and President of Gallagher Koster (alternate name, Koster Insurance Agency, Inc.) and VEBA Service Group, LLC. Mr. Gal...
CEO Compensation Analysis
Compensation vs Market: Pat's total compensation ($USD13.88M) is about average for companies of similar size in the US market ($USD13.26M).
Compensation vs Earnings: Pat's compensation has increased by more than 20% in the past year.
Leadership Team
Experienced Management: AJG's management team is seasoned and experienced (13.7 years average tenure).
Board Members
Experienced Board: AJG's board of directors are considered experienced (8.8 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 employee growth, exchange listings and data sources
All financial data provided by Standard & Poor's Capital IQ.
Data
Last Updated (UTC time)
Company Analysis
2022/05/25 00:00
End of Day Share Price
2022/05/25 00:00
Earnings
2022/03/31
Annual Earnings
2021/12/31
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.