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AJG

Arthur J. GallagherNYSE:AJG Stock Report

Market Cap

US$31.3b

7D

1.6%

1Y

48.6%

Updated

23 Sep, 2021

Data

Company Financials +
AJG fundamental analysis
Snowflake Score
Valuation0/6
Future Growth1/6
Past Performance4/6
Financial Health5/6
Dividends4/6

AJG Overview

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, India, and the United Kingdom.

Arthur J. Gallagher Competitors

Goosehead Insurance

NasdaqGS:GSHD

US$5.8b

BRP Group

NasdaqGS:BRP

US$3.7b

eHealth

NasdaqGS:EHTH

US$970.4m

Accenture

NYSE:ACN

US$212.2b

Price History & Performance

Summary of all time highs, changes and price drops for Arthur J. Gallagher
Historical stock prices
Current Share PriceUS$152.26
52 Week HighUS$101.36
52 Week LowUS$154.03
Beta0.69
1 Month Change6.18%
3 Month Change7.30%
1 Year Change48.62%
3 Year Change104.51%
5 Year Change202.58%
Change since IPO2,360.77%

Recent News & Updates

Shareholder Returns

AJGUS InsuranceUS Market
7D1.6%-0.6%-0.5%
1Y48.6%42.4%37.5%

Return vs Industry: AJG exceeded the US Insurance industry which returned 40.9% over the past year.

Return vs Market: AJG exceeded the US Market which returned 36.2% over the past year.

Price Volatility

Is AJG's price volatile compared to industry and market?
AJG volatility
AJG Beta0.69
Industry Beta0.97
Market Beta1

Stable Share Price: AJG is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 2% a week.

Volatility Over Time: AJG's weekly volatility (2%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
192733,406Pat Gallagherhttps://www.ajg.com

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, India, 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.

Arthur J. Gallagher Fundamentals Summary

How do Arthur J. Gallagher's earnings and revenue compare to its market cap?
AJG fundamental statistics
Market CapUS$31.30b
Earnings (TTM)US$891.10m
Revenue (TTM)US$7.43b

35.3x

P/E Ratio

4.2x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
AJG income statement (TTM)
RevenueUS$7.43b
Cost of RevenueUS$4.71b
Gross ProfitUS$2.71b
ExpensesUS$1.82b
EarningsUS$891.10m

Last Reported Earnings

Jun 30, 2021

Next Earnings Date

n/a

Earnings per share (EPS)4.57
Gross Margin36.51%
Net Profit Margin12.00%
Debt/Equity Ratio72.9%

How did AJG perform over the long term?

See historical performance and comparison

Dividends

1.3%

Current Dividend Yield

41%

Payout Ratio

Valuation

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

35.33x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: AJG ($152.26) is trading above our estimate of fair value ($127.17)

Significantly Below Fair Value: AJG is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: AJG is poor value based on its PE Ratio (35.3x) compared to the US Insurance industry average (9.5x).

PE vs Market: AJG is poor value based on its PE Ratio (35.3x) compared to the US market (17.7x).


Price to Earnings Growth Ratio

PEG Ratio: AJG is poor value based on its PEG Ratio (3.3x)


Price to Book Ratio

PB vs Industry: AJG is overvalued based on its PB Ratio (3.8x) compared to the US Insurance industry average (1.1x).


Future Growth

How is Arthur J. Gallagher forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

10.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AJG's forecast earnings growth (10.6% per year) is above the savings rate (2%).

Earnings vs Market: AJG's earnings (10.6% per year) are forecast to grow slower than the US market (14.9% per year).

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

Revenue vs Market: AJG's revenue (1.4% per year) is forecast to grow slower than the US market (9.8% per year).

High Growth Revenue: AJG's revenue (1.4% 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 (12.9%).


Past Performance

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

14.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: AJG has high quality earnings.

Growing Profit Margin: AJG's current net profit margins (12%) are higher than last year (10.7%).


Past Earnings Growth Analysis

Earnings Trend: AJG's earnings have grown by 14.7% per year over the past 5 years.

Accelerating Growth: AJG's earnings growth over the past year (23%) exceeds its 5-year average (14.7% per year).

Earnings vs Industry: AJG earnings growth over the past year (23%) underperformed the Insurance industry 76%.


Return on Equity

High ROE: AJG's Return on Equity (11.2%) is considered low.


Financial Health

How is Arthur J. Gallagher's financial position?


Financial Position Analysis

Short Term Liabilities: AJG's short term assets ($15.9B) exceed its short term liabilities ($12.0B).

Long Term Liabilities: AJG's short term assets ($15.9B) exceed its long term liabilities ($7.4B).


Debt to Equity History and Analysis

Debt Level: AJG's debt to equity ratio (72.9%) is considered high.

Reducing Debt: AJG's debt to equity ratio has reduced from 74.7% to 72.9% over the past 5 years.

Debt Coverage: AJG's debt is well covered by operating cash flow (26.9%).

Interest Coverage: AJG's interest payments on its debt are well covered by EBIT (10.7x coverage).


Balance Sheet


Dividend

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

1.26%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: AJG's dividend (1.26%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.35%).

High Dividend: AJG's dividend (1.26%) is low compared to the top 25% of dividend payers in the US market (3.63%).


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.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (40.7%), AJG's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: AJG's dividends in 3 years are forecast to be well covered by earnings (33.1% payout ratio).


Next Steps

Management

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

13.0yrs

Average management tenure


CEO

Pat Gallagher (69 yo)

26.67yrs

Tenure

US$11,177,461

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 ($USD11.18M) is about average for companies of similar size in the US market ($USD11.36M).

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 years average tenure).


Board Members

Experienced Board: AJG's board of directors are considered experienced (6.8 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 been diluted in the past year, with total shares outstanding growing by 8%.


Top Shareholders

Company Information

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


Key Information

  • Name: Arthur J. Gallagher & Co.
  • Ticker: AJG
  • Exchange: NYSE
  • Founded: 1927
  • Industry: Insurance Brokers
  • Sector: Insurance
  • Market Cap: US$31.300b
  • Shares outstanding: 206.75m
  • Website: https://www.ajg.com

Number of Employees


Location

  • Arthur J. Gallagher & Co.
  • 2850 Golf Road
  • Rolling Meadows
  • Illinois
  • 60008-4050
  • United States

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/09/23 22:55
End of Day Share Price2021/09/23 00:00
Earnings2021/06/30
Annual Earnings2020/12/31


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.