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Arthur J. Gallagher

NYSE:AJG
Snowflake Description

Excellent balance sheet established dividend payer.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
AJG
NYSE
$17B
Market Cap
  1. Home
  2. US
  3. Insurance
Company description

Arthur J. Gallagher & Co., together with its subsidiaries, provides insurance brokerage, consulting, and third party claims settlement and administration services to entities in the United States and internationally. The last earnings update was 78 days ago. More info.


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AJG Share Price and Events
7 Day Returns
1.6%
NYSE:AJG
0.6%
US Insurance
1.1%
US Market
1 Year Returns
32.3%
NYSE:AJG
16.1%
US Insurance
4.7%
US Market
AJG Shareholder Return
  7 Day 30 Day 90 Day 1 Year 3 Year 5 Year
Arthur J. Gallagher (AJG) 1.6% 5.1% 14.9% 32.3% 89.3% 98.4%
US Insurance 0.6% 3.2% 9.6% 16.1% 40.2% 52.5%
US Market 1.1% 4.3% 2.9% 4.7% 37.7% 43.6%
1 Year Return vs Industry and Market
  • AJG outperformed the Insurance industry which returned 16.1% over the past year.
  • AJG outperformed the Market in United States of America which returned 4.7% over the past year.
Price Volatility
AJG
Industry
5yr Volatility vs Market

AJG Value

 Is Arthur J. Gallagher undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Arthur J. Gallagher to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for Arthur J. Gallagher.

NYSE:AJG Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model Excess Returns Model
Stable EPS Weighted future Return on Equity estimates from 4 analysts.
= Stable Book Value * Return on Equity
= $34.56 * 14%
$4.83
Book Value of Equity per Share Weighted future Book Value estimates from 3 analysts. $34.56
Discount Rate (Cost of Equity) See below 8%
Perpetual Growth Rate 10-Year US Government Bond Rate 2.7%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for NYSE:AJG
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year US Govt Bond Rate 2.7%
Equity Risk Premium S&P Global 6%
Insurance Unlevered Beta Simply Wall St/ S&P Global 0.69
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 0.685 (1 + (1- 21%) (27.08%))
0.887
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
0.89
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 2.73% + (0.887 * 5.96%)
8.02%

Discounted Cash Flow Calculation for NYSE:AJG using Excess Returns Model Model

The calculations below outline how an intrinsic value for Arthur J. Gallagher is arrived at using the Excess Return Model. This approach is used for finance firms where free cash flow is difficult to estimate.

In the Excess Return Model the value of a firm can be written as the sum of capital invested currently in the firm and the present value of excess returns that the firm expects to make in the future.

The model is sensitive to the Return on Equity of the company versus the Cost of Equity, how these are calculated is detailed below the main calculation.

Note the calculations below are per share.

See our documentation to learn about this calculation.

NYSE:AJG Value of Excess Returns
Calculation Result
Excess Returns = (Stable Return on equity – Cost of equity) (Book Value of Equity per share)
= (14% – 8.02%) * $34.56)
$2.06
Terminal Value of Excess Returns = Excess Returns / (Cost of Equity - Expected Growth Rate)
= $2.06 / (8.02% - 2.73%)
$38.89
Value of Equity = Book Value per share + Terminal Value of Excess Returns
= $34.56 + $38.89
$73.45
NYSE:AJG Discount to Share Price
Calculation Result
Value per share (USD) From above. $73.45
Current discount Discount to share price of $92.19
= -1 x ($92.19 - $73.45) / $73.45
-25.5%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

  • The current share price of Arthur J. Gallagher is above its future cash flow value.
Often investors are willing to pay a premium for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Arthur J. Gallagher's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Arthur J. Gallagher's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
NYSE:AJG PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2019-03-31) in USD $3.78
NYSE:AJG Share Price ** NYSE (2019-07-16) in USD $92.19
United States of America Insurance Industry PE Ratio Median Figure of 89 Publicly-Listed Insurance Companies 17.54x
United States of America Market PE Ratio Median Figure of 3,084 Publicly-Listed Companies 17.98x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of Arthur J. Gallagher.

NYSE:AJG PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= NYSE:AJG Share Price ÷ EPS (both in USD)

= 92.19 ÷ 3.78

24.37x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Arthur J. Gallagher is overvalued based on earnings compared to the US Insurance industry average.
  • Arthur J. Gallagher is overvalued based on earnings compared to the United States of America market.
Price based on expected Growth
Does Arthur J. Gallagher's expected growth come at a high price?
Raw Data
NYSE:AJG PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section 24.37x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 9 Analysts
Not available
United States of America Insurance Industry PEG Ratio Median Figure of 62 Publicly-Listed Insurance Companies 1.73x
United States of America Market PEG Ratio Median Figure of 2,125 Publicly-Listed Companies 1.58x

*Line of best fit is calculated by linear regression .

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Unable to calculate PEG ratio for Arthur J. Gallagher, we can't assess if its growth is good value.
Price based on value of assets
What value do investors place on Arthur J. Gallagher's assets?
Raw Data
NYSE:AJG PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2019-03-31) in USD $26.34
NYSE:AJG Share Price * NYSE (2019-07-16) in USD $92.19
United States of America Insurance Industry PB Ratio Median Figure of 118 Publicly-Listed Insurance Companies 1.25x
United States of America Market PB Ratio Median Figure of 5,240 Publicly-Listed Companies 1.81x
NYSE:AJG PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= NYSE:AJG Share Price ÷ Book Value per Share (both in USD)

= 92.19 ÷ 26.34

3.5x

* Primary Listing of Arthur J. Gallagher.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Arthur J. Gallagher is overvalued based on assets compared to the US Insurance industry average.
X
Value checks
We assess Arthur J. Gallagher's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Insurance industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Insurance industry average (and greater than 0)? (1 check)
  5. Arthur J. Gallagher has a total score of 0/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

AJG Future Performance

 How is Arthur J. Gallagher expected to perform in the next 1 to 3 years based on estimates from 9 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
7.6%
Expected annual growth in earnings per share.
Earnings growth vs Low Risk Savings
Is Arthur J. Gallagher expected to grow at an attractive rate?
  • Arthur J. Gallagher's earnings growth is expected to exceed the low risk savings rate of 2.7%.
Growth vs Market Checks
  • Arthur J. Gallagher's earnings growth is positive but not above the United States of America market average.
  • Arthur J. Gallagher's revenue growth is expected to exceed the United States of America market average.
Annual Growth Rates Comparison
Raw Data
NYSE:AJG Future Growth Rates Data Sources
Data Point Source Value (per year)
NYSE:AJG Future Earnings per Share Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 9 Analysts 7.6%
NYSE:AJG Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 9 Analysts 9.6%
United States of America Insurance Industry Earnings Growth Rate Market Cap Weighted Average 8.8%
United States of America Insurance Industry Revenue Growth Rate Market Cap Weighted Average 3.1%
United States of America Market Earnings Growth Rate Market Cap Weighted Average 14.1%
United States of America Market Revenue Growth Rate Market Cap Weighted Average 7.5%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
NYSE:AJG Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (3 months ago) See Below
Future Estimates Average of up to 9 Analyst Estimates (S&P Global) See Below
All numbers in USD Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
NYSE:AJG Future Estimates Data
Date (Data in USD Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2021-12-31 9,098 1
2020-12-31 7,940 1,122 799 4
2019-12-31 7,370 1,039 4
NYSE:AJG Past Financials Data
Date (Data in USD Millions) Revenue Cash Flow Net Income *
2019-03-31 6,807 887 694
2018-12-31 6,711 765 634
2018-09-30 6,630 766 570
2018-06-30 6,451 907 553
2018-03-31 6,238 621 526
2017-12-31 6,051 854 481
2017-09-30 5,948 874 505
2017-06-30 5,874 781 517
2017-03-31 5,849 565 597
2016-12-31 5,490 650 397
2016-09-30 5,489 695 382
2016-06-30 5,427 694 392

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • Arthur J. Gallagher's earnings are expected to grow by 7.6% yearly, however this is not considered high growth (20% yearly).
  • Arthur J. Gallagher's revenue is expected to grow by 9.6% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
NYSE:AJG Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (3 months ago) See Below
Future Estimates Average of up to 9 Analyst Estimates (S&P Global) See Below

All data from Arthur J. Gallagher Company Filings, last reported 3 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NYSE:AJG Future Estimates Data
Date (Data in USD Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2021-12-31
2020-12-31 4.07 4.20 3.88 3.00
2019-12-31 3.73 3.75 3.71 2.00
NYSE:AJG Past Financials Data
Date (Data in USD Millions) EPS *
2019-03-31 3.78
2018-12-31 3.47
2018-09-30 3.13
2018-06-30 3.05
2018-03-31 2.91
2017-12-31 2.67
2017-09-30 2.81
2017-06-30 2.89
2017-03-31 3.35
2016-12-31 2.23
2016-09-30 2.15
2016-06-30 2.22

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Arthur J. Gallagher is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
X
Future performance checks
We assess Arthur J. Gallagher's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the United States of America market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the United States of America market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Arthur J. Gallagher has a total score of 2/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

AJG Past Performance

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

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Arthur J. Gallagher's growth in the last year to its industry (Insurance).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Arthur J. Gallagher's year on year earnings growth rate has been positive over the past 5 years.
  • Arthur J. Gallagher's 1-year earnings growth exceeds its 5-year average (31.9% vs 17.9%)
  • Arthur J. Gallagher's earnings growth has exceeded the US Insurance industry average in the past year (31.9% vs 9.2%).
Earnings and Revenue History
Arthur J. Gallagher's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from Arthur J. Gallagher Company Filings, last reported 3 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NYSE:AJG Past Revenue, Cash Flow and Net Income Data
Date (Data in USD Millions) Revenue Net Income * G+A Expenses R&D Expenses
2019-03-31 6,806.70 693.90 926.90
2018-12-31 6,711.20 633.50 882.80
2018-09-30 6,629.50 569.50 865.70
2018-06-30 6,450.60 552.90 847.70
2018-03-31 6,237.70 526.20 806.10
2017-12-31 6,050.90 481.30 790.40
2017-09-30 5,948.40 504.90 790.90
2017-06-30 5,873.90 516.70 767.90
2017-03-31 5,848.90 596.70 762.10
2016-12-31 5,489.50 396.80 739.30
2016-09-30 5,489.10 381.60 764.80
2016-06-30 5,427.30 392.10 770.80
2016-03-31 5,369.90 381.40 769.50
2015-12-31 5,301.00 356.80 769.00
2015-09-30 5,208.90 346.00 780.20
2015-06-30 5,071.80 306.30 779.90
2015-03-31 4,885.00 276.00 749.70
2014-12-31 4,559.50 303.40 701.60
2014-09-30 4,220.20 311.90 638.00
2014-06-30 3,778.50 292.90 574.60
2014-03-31 3,383.90 277.40 544.60
2013-12-31 3,154.50 268.60 515.10
2013-09-30 2,934.70 242.10 514.00
2013-06-30 2,753.30 229.20 505.60
2013-03-31 2,624.10 207.40 492.60
2012-12-31 2,504.60 195.00 469.30
2012-09-30 2,412.10 202.00 442.40

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • Arthur J. Gallagher has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
  • Arthur J. Gallagher used its assets more efficiently than the US Insurance industry average last year based on Return on Assets.
  • Arthur J. Gallagher's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).
X
Past performance checks
We assess Arthur J. Gallagher's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Insurance industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Arthur J. Gallagher has a total score of 4/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

AJG Health

 How is Arthur J. Gallagher's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Arthur J. Gallagher's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Arthur J. Gallagher is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Arthur J. Gallagher's cash and other short term assets cover its long term commitments.
Balance sheet
This treemap shows a more detailed breakdown of Arthur J. Gallagher's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • Low level of unsold assets.
  • Debt is covered by short term assets, assets are 2.3x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from Arthur J. Gallagher Company Filings, last reported 3 months ago.

NYSE:AJG Past Debt and Equity Data
Date (Data in USD Millions) Total Equity Total Debt Cash & Short Term Investments
2019-03-31 4,958.20 4,214.90 871.50
2018-12-31 4,569.70 3,610.40 607.20
2018-09-30 4,612.70 3,530.50 605.00
2018-06-30 4,513.10 3,487.10 652.20
2018-03-31 4,584.50 3,273.10 697.90
2017-12-31 4,299.70 3,133.00 681.20
2017-09-30 4,172.20 3,023.10 564.90
2017-06-30 3,910.00 3,112.80 587.80
2017-03-31 3,727.30 2,944.10 564.00
2016-12-31 3,655.80 2,848.20 545.50
2016-09-30 3,741.20 2,785.70 531.80
2016-06-30 3,655.80 2,730.60 411.10
2016-03-31 3,652.30 2,523.00 425.40
2015-12-31 3,688.20 2,453.70 480.40
2015-09-30 3,707.90 2,392.60 369.70
2015-06-30 3,711.50 2,371.60 321.70
2015-03-31 3,219.60 2,335.80 276.80
2014-12-31 3,305.10 2,392.90 314.40
2014-09-30 3,256.00 2,421.20 290.50
2014-06-30 3,249.60 2,517.00 973.50
2014-03-31 2,144.20 1,892.40 739.20
2013-12-31 2,085.50 1,455.50 298.10
2013-09-30 1,932.20 1,060.50 286.90
2013-06-30 1,702.00 925.00 240.00
2013-03-31 1,664.70 775.00 224.00
2012-12-31 1,658.60 854.00 302.10
2012-09-30 1,636.20 725.00 305.20
  • Arthur J. Gallagher's level of debt (85%) compared to net worth is high (greater than 40%).
  • The level of debt compared to net worth has been reduced over the past 5 years (88.1% vs 85% today).
  • Debt is well covered by operating cash flow (21%, greater than 20% of total debt).
  • Interest payments on debt are well covered by earnings (EBIT is 9.1x coverage).
X
Financial health checks
We assess Arthur J. Gallagher's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Arthur J. Gallagher has a total score of 5/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

AJG Dividends

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

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
1.87%
Current annual income from Arthur J. Gallagher dividends. Estimated to be 1.95% next year.
If you bought $2,000 of Arthur J. Gallagher shares you are expected to receive $37 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Arthur J. Gallagher's pays a higher dividend yield than the bottom 25% of dividend payers in United States of America (1.42%).
  • Arthur J. Gallagher's dividend is below the markets top 25% of dividend payers in United States of America (3.73%).
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
NYSE:AJG Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 9 Analyst Estimates (S&P Global) See Below
United States of America Insurance Industry Average Dividend Yield Market Cap Weighted Average of 80 Stocks 2.3%
United States of America Market Average Dividend Yield Market Cap Weighted Average of 2017 Stocks 2.4%
United States of America Minimum Threshold Dividend Yield 10th Percentile 0.8%
United States of America Bottom 25% Dividend Yield 25th Percentile 1.4%
United States of America Top 25% Dividend Yield 75th Percentile 3.7%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

NYSE:AJG Future Dividends Estimate Data
Date (Data in $) Dividend per Share (annual) Avg. No. Analysts
2021-12-31 1.86 3.00
2020-12-31 1.82 7.00
2019-12-31 1.73 7.00
NYSE:AJG Past Annualized Dividends Data
Date (Data in $) Dividend per share (annual) Avg. Yield (%)
2019-04-24 1.720 2.003
2019-01-30 1.720 2.175
2018-10-24 1.640 2.204
2018-07-24 1.640 2.252
2018-04-25 1.640 2.425
2018-01-24 1.640 2.388
2017-10-25 1.560 2.426
2017-04-26 1.560 2.670
2017-01-25 1.560 2.790
2016-10-27 1.520 2.978
2016-07-27 1.520 3.062
2016-04-27 1.520 3.198
2016-01-28 1.520 3.646
2015-10-22 1.480 3.564
2015-07-23 1.480 3.367
2015-04-22 1.480 3.071
2015-01-29 1.480 3.150
2014-10-23 1.440 3.049
2014-07-24 1.440 3.163
2014-04-23 1.440 3.140
2014-01-23 1.440 3.125
2013-10-23 1.400 2.974
2013-07-25 1.400 3.178
2013-04-26 1.400 3.173
2013-01-24 1.400 3.550
2012-10-24 1.360 3.812
2012-07-26 1.360 3.774
2012-04-25 1.360 3.853
2012-01-26 1.360 3.872
2011-10-20 1.320 4.152
2011-07-21 1.320 4.849
2011-04-21 1.320 4.615
2011-01-27 1.320 4.336
2010-10-21 1.280 4.455
2010-07-22 1.280 4.969
2010-04-21 1.280 5.072
2010-01-28 1.280 5.274
2009-10-22 1.280 5.660
2009-07-23 1.280 5.369
2009-04-24 1.280 6.054
2009-01-29 1.280 7.343
2008-10-23 1.280 5.301
2008-07-24 1.280 4.958

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Dividends per share have been stable in the past 10 years.
  • Dividends per share have increased over the past 10 years.
Current Payout to shareholders
What portion of Arthur J. Gallagher's earnings are paid to the shareholders as a dividend.
  • Dividends paid are well covered by earnings (2.3x coverage).
Future Payout to shareholders
  • Dividends after 3 years are expected to be well covered by earnings (2.4x coverage).
X
Income/ dividend checks
We assess Arthur J. Gallagher's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 0.8%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can Arthur J. Gallagher afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. Arthur J. Gallagher has a total score of 5/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

AJG Management

 What is the CEO of Arthur J. Gallagher's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Pat Gallagher
AGE 67
TENURE AS CEO 24.5 years
CEO Bio

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. Gallagher has been the Chief Executive Officer of Arthur J. Gallagher & Co. at Gallagher Bassett Services, Inc. since 1995 and has been its President since 1990. He has been an Executive Chairman at Arthur J Gallagher & Co., since October 19, 2006 and its Director since 1986. He served as the Chief Executive Officer and President of Roberts & Roberts Insurance Service Inc. Mr. Gallagher’s 19 years as the Chief Executive Officer of a publicly-listed services business. He served as Chief Operating Officer of Arthur J Gallagher & Co., from 1990 to 1994 and served as its Vice President, Operations from 1985 to 1990. He began his career with Gallagher in 1974 as a Production Account Executive. Mr. Gallagher serves as the Chairman of Gallagher Koster (alternate name, Koster Insurance Agency, Inc.) and VEBA Service Group, LLC. He served as the Chairman of Roberts & Roberts Insurance Service Inc. He has been an Independent Director of InnerWorkings Inc., since August 2011. Mr. Gallagher serves on the Advisory Council of Boys Hope/Girls Hope, a charitable organization. He is also on the Board of Advisors for Catholic Charities. He is the boards of the American Institute for Chartered Property Casualty Underwriters (AICPCU) in 2003. In addition, he serves on the Board of Founding Directors of the International Insurance Foundation and is a member of The Economic Club of Chicago, the Executive Club of Chicago and the Commercial Club of Chicago. Mr. Gallagher holds a Bachelor of Arts in Government from the Cornell University.

CEO Compensation
  • Insufficient data for Pat to compare compensation growth.
  • Insufficient data for Pat to establish whether their remuneration is reasonable compared to companies of similar size in United States of America.
Management Team Tenure

Average tenure and age of the Arthur J. Gallagher management team in years:

11
Average Tenure
57
Average Age
  • The average tenure for the Arthur J. Gallagher management team is over 5 years, this suggests they are a seasoned and experienced team.
Management Team

Doug Howell

TITLE
Corporate VP & Chief Financial Officer
COMPENSATION
$4M
AGE
57
TENURE
16.3 yrs

Walt Bay

TITLE
Corporate VP
COMPENSATION
$3M
AGE
56
TENURE
12.5 yrs

Tom Gallagher

TITLE
Corporate VP and President of Global Property & Casualty Brokerage
COMPENSATION
$5M
AGE
60
TENURE
2.5 yrs

Scott Hudson

TITLE
Corporate VP
COMPENSATION
$3M
AGE
57
TENURE
9.5 yrs

Patrick Gallagher

TITLE
Executive Vice President of Midwest Region
COMPENSATION
$8M

Pat Gallagher

TITLE
Chairman
AGE
67
TENURE
24.5 yrs

David Long

TITLE
Vice President
AGE
67

Richard Cary

TITLE
Chief Accounting Officer & Controller
AGE
56
TENURE
18.5 yrs

Sean Connelly

TITLE
Global Chief Information Officer and Corporate Vice President
AGE
52
TENURE
4.2 yrs

Ray Iardella

TITLE
Vice President of Investor Relations
TENURE
3.5 yrs
Board of Directors Tenure

Average tenure and age of the Arthur J. Gallagher board of directors in years:

8.1
Average Tenure
68
Average Age
  • The tenure for the Arthur J. Gallagher board of directors is about average.
Board of Directors

Pat Gallagher

TITLE
Chairman
AGE
67
TENURE
12.8 yrs

Kay McCurdy

TITLE
Independent Director
COMPENSATION
$255K
AGE
68
TENURE
13.8 yrs

Bill Bax

TITLE
Independent Director
COMPENSATION
$265K
AGE
75
TENURE
12.8 yrs

Sherry Barrat

TITLE
Independent Director
COMPENSATION
$260K
AGE
69
TENURE
6 yrs

David Jack

TITLE
Chairman of Technical Advisory Board
TENURE
3.8 yrs

David Johnson

TITLE
Lead Director
COMPENSATION
$270K
AGE
63
TENURE
3.5 yrs

Norman Rosenthal

TITLE
Independent Director
COMPENSATION
$240K
AGE
68
TENURE
11.5 yrs

Frank English

TITLE
Independent Director
COMPENSATION
$240K
AGE
73
TENURE
10.2 yrs

David Coldman

TITLE
Independent Director
COMPENSATION
$240K
AGE
71
TENURE
4.7 yrs

Ralph Nicoletti

TITLE
Independent Director
COMPENSATION
$240K
AGE
61
TENURE
3.5 yrs
Who owns this company?
Recent Insider Trading
  • Arthur J. Gallagher individual insiders have only sold shares in the past 3 months.
Recent Insider Transactions
Announced Type Name Entity Role Start End Shares Max Price ($) Value ($)
05. Jun 19 Sell William Bax Individual 04. Jun 19 04. Jun 19 -1,200 $85.11 $-102,132
03. Jun 19 Sell Susan Pietrucha Individual 24. May 19 24. May 19 -1,990 $84.29 $-167,737
07. May 19 Sell Frank English Individual 03. May 19 03. May 19 -800 $83.08 $-66,464
19. Feb 19 Sell David Johnson Individual 14. Feb 19 15. Feb 19 -5,000 $79.74 $-396,828
07. Feb 19 Sell Frank English Individual 05. Feb 19 05. Feb 19 -1,100 $77.66 $-85,426
21. Dec 18 Buy Thomas Gallagher Individual 19. Dec 18 19. Dec 18 4,000 $73.20 $292,800
18. Sep 18 Sell Walter Bay Individual 14. Sep 18 14. Sep 18 -3,985 $75.09 $-299,234
27. Aug 18 Sell Frank English Individual 24. Aug 18 24. Aug 18 -2,000 $72.07 $-144,140
02. Aug 18 Sell Kay McCurdy Individual 01. Aug 18 01. Aug 18 -3,500 $71.10 $-248,850
X
Management checks
We assess Arthur J. Gallagher's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Arthur J. Gallagher has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

AJG News

Simply Wall St News

How Many Arthur J. Gallagher & Co. (NYSE:AJG) Shares Have Insiders Sold, In The Last Year?

So shareholders might well want to know whether insiders have been buying or selling shares in Arthur J. … But logic dictates you should pay some attention to whether insiders are buying or selling shares. … Gallagher The Last 12 Months Of Insider Transactions At Arthur J.

Simply Wall St -

How Arthur J. Gallagher & Co. (NYSE:AJG) Could Add Value To Your Portfolio

For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on Arthur J. … Gallagher, I've compiled three important factors you should look at: Future Outlook: What are well-informed industry analysts predicting for AJG’s future growth? … Take a look at our free research report of analyst consensus for AJG’s outlook.

Simply Wall St -

Is Arthur J. Gallagher & Co. (NYSE:AJG) A Smart Pick For Income Investors?

(NYSE:AJG) be an attractive dividend share to own for the long haul? Investors are often drawn to strong companies with the idea of reinvesting the dividends. On the other hand, investors have been known to buy a stock because of its yield, and then lose money if the company's dividend doesn't live up to expectations. A slim 2.1% yield is hard to get excited about, but the long payment history is respectable. At the right price, or with strong growth opportunities, Arthur J. Gallagher could have potential. There are a few simple ways to reduce the risks of buying Arthur J. Gallagher for its dividend, and we'll go through these below. Explore this interactive chart for our latest analysis on Arthur J. Gallagher! NYSE:AJG Historical Dividend Yield, May 14th 2019 Payout ratios Dividends are typically paid from company earnings. If a company pays more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. As a result, we should always investigate whether a company can afford its dividend, measured as a percentage of a company's net income after tax. In the last year, Arthur J. Gallagher paid out 44% of its profit as dividends. This is a middling range that strikes a nice balance between paying dividends to shareholders, and retaining enough earnings to invest in future growth. Plus, there is room to increase the payout ratio over time. We also measure dividends paid against a company's levered free cash flow, to see if enough cash was generated to cover the dividend. Arthur J. Gallagher's cash payout ratio in the last year was 40%, which suggests dividends were well covered by cash generated by the business. Is Arthur J. Gallagher's Balance Sheet Risky? As Arthur J. Gallagher has a meaningful amount of debt, we need to check its balance sheet to see if the company might have debt risks. A rough way to check this is with these two simple ratios: a) net debt divided by EBITDA (earnings before interest, tax, depreciation and amortisation), and b) net interest cover. Net debt to EBITDA is a measure of a company's total debt. Net interest cover measures the ability to meet interest payments on debt. Essentially we check that a) a company does not have too much debt, and b) that it can afford to pay the interest. … Dividend Growth Potential Dividend payments have been consistent over the past few years, but we should always check if earnings per share (EPS) are growing, as this will help maintain the purchasing power of the dividend. … Strong earnings per share (EPS) growth might encourage our interest in the company despite fluctuating dividends, which is why it's great to see Arthur J. Gallagher has grown its earnings per share at 13% per annum over the past five years. A company paying out less than a quarter of its earnings as dividends, and growing earnings at more than 10% per annum, looks to be right in the cusp of its growth phase. At the right price, we might be interested. Conclusion Dividend investors should always want to know if a) a company's dividends are affordable, b) if there is a track record of consistent payments, and c) if the dividend is capable of growing.

Simply Wall St -

Here's What Arthur J. Gallagher & Co.'s (NYSE:AJG) P/E Is Telling Us

This article is written for those who want to get better at using price to earnings ratios (P/E ratios). … Looking at earnings over the last twelve months, Arthur J. … Price to Earnings Ratio = Price per Share ÷ Earnings per Share (EPS)

Simply Wall St -

Buy Arthur J. Gallagher & Co. (NYSE:AJG) When Everyone Panics

Stock market crashes are an opportune time to buy. … High quality companies, such as Arthur J. … Gallagher & Co., are impacted by general market panic and sell-off, but the fundamentals of these companies stay the same.

Simply Wall St -

I Ran A Stock Scan For Earnings Growth And Arthur J. Gallagher (NYSE:AJG) Passed With Ease

Like a puppy chasing its tail, some new investors often chase 'the next big thing', even if that means buying 'story stocks' without revenue, let alone profit. … Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. … Gallagher's EBIT margins were flat over the last year, revenue grew by a solid 11% to US$6.7b.

Simply Wall St -

Arthur J. Gallagher & Co. (NYSE:AJG) Delivered A Better ROE Than Its Industry

While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. … One way to conceptualize this, is that for each $1 of shareholders' equity it has, the company made $0.15 in profit. … Return on Equity = Net Profit ÷ Shareholders' Equity

Simply Wall St -

Should You Think About Buying Arthur J. Gallagher & Co. (NYSE:AJG) Now?

saw a decent share price growth in the teens level on the NYSE over the last few months. … With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price?

Simply Wall St -

Should You Be Worried About Insider Transactions At Arthur J. Gallagher & Co. (NYSE:AJG)?

But logic dictates you should pay some attention to whether insiders are buying or selling shares. … The Last 12 Months Of Insider Transactions At Arthur J. … All up, insiders sold more shares in Arthur J.

Simply Wall St -

Arthur J. Gallagher & Co. (NYSE:AJG): 4 Days To Buy Before The Ex-Dividend Date

Gallagher & Co.'s (NYSE:AJG) upcoming dividend of US$0.43 per share payable on the 15 March 2019? … Has it paid dividend every year without dramatically reducing payout in the past? … Based on future earnings growth, will it be able to continue to payout dividend at the current rate

Simply Wall St -

AJG Company Info

Description

Arthur J. Gallagher & Co., together with its subsidiaries, provides insurance brokerage, consulting, and third party claims settlement and administration services to entities in the United States and internationally. 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. Arthur J. Gallagher & Co. was founded in 1927 and is headquartered in Rolling Meadows, Illinois.

Details
Name: Arthur J. Gallagher & Co.
AJG
Exchange: NYSE
Founded: 1927
$17,078,381,880
185,252,000
Website: http://www.ajg.com
Address: Arthur J. Gallagher & Co.
2850 Golf Road,
Rolling Meadows,
Illinois, 60008,
United States
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
NYSE AJG Common Stock New York Stock Exchange US USD 20. Jun 1984
DB GAH Common Stock Deutsche Boerse AG DE EUR 20. Jun 1984
LSE 0ITL Common Stock London Stock Exchange GB USD 20. Jun 1984
BMV AJG * Common Stock Bolsa Mexicana de Valores MX MXN 20. Jun 1984
Number of employees
Current staff
Staff numbers
30,362
Arthur J. Gallagher employees.
Industry
Insurance Brokers
Insurance
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2019/07/16 23:37
End of day share price update: 2019/07/16 00:00
Last estimates confirmation: 2019/07/12
Last earnings filing: 2019/04/29
Last earnings reported: 2019/03/31
Last annual earnings reported: 2018/12/31


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

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.