Arthur J. Gallagher & Co.
Arthur J. Gallagher & Co. Fundamental Analysis
Arthur J. Gallagher & Co. (AJG) shows moderate financial fundamentals with a PE ratio of 37.35, profit margin of 10.72%, and ROE of 6.50%. The company generates $13.8B in annual revenue with strong year-over-year growth of 14.72%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 54.7/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze AJG's fundamental strength across five key dimensions:
Efficiency Score
WeakAJG struggles to generate sufficient returns from assets.
Valuation Score
ModerateAJG shows balanced valuation metrics.
Growth Score
ExcellentAJG delivers strong and consistent growth momentum.
Financial Health Score
ExcellentAJG maintains a strong and stable balance sheet.
Profitability Score
WeakAJG struggles to sustain strong margins.
Key Financial Metrics
Is AJG Expensive or Cheap?
P/E Ratio
AJG trades at 37.35 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, AJG's PEG of -4.26 indicates potential undervaluation.
Price to Book
The market values Arthur J. Gallagher & Co. at 2.39 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 11.60 times EBITDA. This signals the market has high growth expectations.
How Well Does AJG Make Money?
Net Profit Margin
For every $100 in sales, Arthur J. Gallagher & Co. keeps $10.72 as profit after all expenses.
Operating Margin
Core operations generate 18.28 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $6.50 in profit for every $100 of shareholder equity.
ROA
Arthur J. Gallagher & Co. generates $2.11 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Arthur J. Gallagher & Co. generates limited operating cash flow of $1.16B, signaling weaker underlying cash strength.
Free Cash Flow
Arthur J. Gallagher & Co. produces free cash flow of $1.06B, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $4.12 in free cash annually.
FCF Yield
AJG converts 1.95% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
37.35
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-4.26
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.39
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.95
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.60
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.06
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.07
vs 25 benchmark
ROA
Return on assets percentage
0.02
vs 25 benchmark
ROCE
Return on capital employed
0.07
vs 25 benchmark
How AJG Stacks Against Its Sector Peers
| Metric | AJG Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 37.35 | 18.73 | Worse (Expensive) |
| ROE | 6.50% | 847.00% | Weak |
| Net Margin | 10.72% | 2562.00% | Weak |
| Debt/Equity | 0.60 | 0.93 | Strong (Low Leverage) |
| Current Ratio | 1.06 | 674.76 | Neutral |
| ROA | 2.11% | -21692.00% (disorted) | Weak |
AJG outperforms its industry in 1 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Arthur J. Gallagher & Co.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
36.90%
Industry Style: Value, Dividend, Cyclical
High GrowthEPS CAGR
84.49%
Industry Style: Value, Dividend, Cyclical
High GrowthFCF CAGR
94.67%
Industry Style: Value, Dividend, Cyclical
High Growth