Fact based stock research
Arthur J. Gallagher (NYSE:AJG)

US3635761097

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

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Arthur J. Gallagher stock research in summary

ajg.com

ANALYSIS: With an Obermatt Combined Rank of 43 (worse than 57% compared with investment alternatives), Arthur J. Gallagher (Insurance Brokers, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Arthur J. Gallagher are low in value (priced high) with a consolidated Value Rank of 21 (worse than 79% of alternatives). But they show above-average growth (Growth Rank of 85) and are safely financed (Safety Rank of 64, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 43, is a hold recommendation based on Arthur J. Gallagher's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Arthur J. Gallagher exhibits low value (Obermatt Value Rank of 21), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 85). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 64) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	21
Growth Rank	85
Safety Rank	64
Combined Rank	43

Country	USA
Industry	Insurance Brokers
Index	D.J. US Insurance, S&P 500
Size class	X-Large

This stock has achievements: Top 10 Stock.

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Arthur J. Gallagher

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	5	21	18	21
GROWTH
GROWTH	45	91	61	85
SAFETY
SAFETY	42	64	64	64
SENTIMENT
SENTIMENT	n/a	47	42	^new
360° VIEW
360° VIEW	n/a	55	86	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Sep-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Arthur J. Gallagher is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	5	21	18	21
GROWTH
GROWTH	45	91	61	85
SAFETY
SAFETY	42	64	64	64
COMBINED
COMBINED	16	43	43	43

Last update of combined financial performance: 6-Oct-2022. Stock analysis on combined financial performance: The higher the rank of Arthur J. Gallagher the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 21 (worse than 79% compared with alternatives), Arthur J. Gallagher shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Arthur J. Gallagher. Price-to-Sales is 9 which means that the stock price compared with what market professionals expect for future profits is higher than 91% of comparable companies, indicating a low value concerning Arthur J. Gallagher's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 16, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Arthur J. Gallagher. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 19 and Dividend Yield, which is lower than 57% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 21, is a sell recommendation based on Arthur J. Gallagher's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Arthur J. Gallagher? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Arthur J. Gallagher? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Arthur J. Gallagher may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	15	19	12	9
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	10	21	20	19
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	6	13	15	16
DIVIDEND YIELD
DIVIDEND YIELD	34	43	44	43
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	5	21	18	21

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Arthur J. Gallagher; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 85 (better than 85% compared with alternatives) for 2022, Arthur J. Gallagher shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Arthur J. Gallagher. Sales Growth has a rank of 100 which means that currently, professionals expect the company to grow more than 100% of its competitors. Capital Growth is also above 48% of competitors with a rank of 85. But Profit Growth only has a rank of 48, which means that currently professionals expect the company to grow its profits less than 52% of its competitors. And Stock Returns have also been below average with a rank of only 41. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 85, is a buy recommendation for growth and momentum investors. Profits are sometimes low if the company invests in the future. The positive revenue and capital investment outlook confirms such an interpretation. Both revenues and capital are solid growth indicators, and lower profits in such a case would be encouraging. But the investors see it differently by punishing the share price. Sometimes, Mister Market is not very reliable, because it is not uncommon for it to be volatile. Investors should look out for signs of growth expenditure that could justify low profit growth, and they may also find reasons why recent stock price developments don't confirm the growth outlook of operations. While operating growth indicators are not perfect, they are more reliable indicators for future performance than stock prices that can repeatedly surprise investors. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	41	74	89	100
PROFIT GROWTH
PROFIT GROWTH	38	37	51	48
CAPITAL GROWTH
CAPITAL GROWTH	n/a	77	10	85
STOCK RETURNS
STOCK RETURNS	61	77	65	41
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	45	91	61	85

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Arthur J. Gallagher.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 64 (better than 64% compared with alternatives), the company Arthur J. Gallagher has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Arthur J. Gallagher is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with all three metrics below average for Arthur J. Gallagher. Liquidity is at 38, meaning that the company generates less profit to service its debt than 62% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 24, meaning the company has an above-average debt-to-equity ratio. It has more debt than 76% of its competitors. Finally, Refinancing is at a rank of 35 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 65% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 64 (better than 64% compared with alternatives), Arthur J. Gallagher has a financing structure that is safer than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing. Investors should look at Obermatt’s Value, Growth, and Sentiment Ranks to confirm a very positive outlook or be careful with investing in stocks of Arthur J. Gallagher because it may suffer significantly in case of future difficulties. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	55	10	25	24
REFINANCING
REFINANCING	37	35	35	35
LIQUIDITY
LIQUIDITY	33	22	48	38
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	42	64	64	64

Last update of Safety Rank: 6-Oct-2022. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Arthur J. Gallagher and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	80	85	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	18	9	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	11	44	^new
MARKET PULSE
MARKET PULSE	n/a	82	67	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	47	42	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Arthur J. Gallagher.
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