We have initiated coverage of Arthur J Gallagher. We assign the company a narrow moat rating and a fair value estimate of $250 per share. We see shares as modestly overvalued, as we think the market is overly focused on the recent tailwinds Gallagher and its insurance brokerage peers have been enjoying.
The stability of its brokerage operations makes Gallagher a relatively steady producer of free cash flow.
Gallagher's established position in a relatively mature market lowers its long-term organic growth prospects.
|
Metric
|
AJG
|
MMC
|
WTW
|
|---|---|---|---|
Price/Earnings (Normalized) | 29.80 | 25.95 | 18.72 |
Price/Book Value | 5.42 | 8.16 | 3.16 |
Price/Sales | 5.78 | 4.68 | 3.14 |
Price/Cash Flow | 26.23 | 20.64 | 17.66 |
|
Metric
|
AJG
|
MMC
|
WTW
|
|---|---|---|---|
Quick Ratio | 0.13 | 0.50 | 0.31 |
Current Ratio | 1.04 | 1.17 | 1.11 |
Interest Coverage | 5.21 | 9.69 | 6.13 |
|
Metric
|
AJG
|
MMC
|
WTW
|
|---|---|---|---|
Return on Assets (Normalized) | 5.91% | 8.90% | 5.56% |
Return on Equity (Normalized) | 30.72% | 34.66% | 16.98% |
Return on Invested Capital (Normalized) | 19.10% | 16.70% | 11.63% |
|
1-Day Chart
|
Name
|
Price
|
Morningstar Rating for Stocks
|
Capital Allocation
|
Economic Moat
|
Market Cap
|
|---|---|---|---|---|---|---|
| Marsh & McLennan Companies Inc
MMC
| Lnfkkkfvs | Jpmgvc | $109.1 Bil | |||
| Aon PLC Class A
AON
| Szmggmctcf | Mgqzq | $75.5 Bil | |||
| Brown & Brown Inc
BRO
| — | Lqk | $29.8 Bil | |||
| Willis Towers Watson PLC
WTW
| Frpthscr | Fphnlq | $29.5 Bil | |||
| Erie Indemnity Co Class A
ERIE
| — | Zmvmt | $28.0 Bil | |||
| CorVel Corp
CRVL
| — | Vvp | $5.3 Bil | |||
| Steadfast Group Ltd
SFGLF
| — | Wmchj | $4.2 Bil | |||
| The Baldwin Insurance Group Inc Class A
BWIN
| — | Clls | $3.3 Bil | |||
| QDM International Inc
QDMI
| — | Nnwplb | $1.1 Bil |
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United States