Arthur J. Gallagher & Co

Find Ratings Reports
AJG : NYSE : Financial
$56.28 up 0.16 | 0.29%
Today's Range: 55.92 - 56.8
Avg. Daily Volume: 895500.0
03/23/17 - 4:02 PM ET

Financial Analysis


ARTHUR J GALLAGHER & CO's gross profit margin for the fourth quarter of its fiscal year 2016 has increased when compared to the same period a year ago. The company has grown its sales and net income during the past quarter when compared with the same quarter a year ago, and although its growth in net income has outpaced the industry average, its revenue growth has not. ARTHUR J GALLAGHER & CO has weak liquidity. Currently, the Quick Ratio is 0.94 which shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has remained virtually unchanged only decreasing by 1.14% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. To learn more visit www.TheStreetRatings.com.



Income Statement Q4 FY16 Q4 FY15
Net Sales ($mil)1385.01334.9
EBITDA ($mil)229.6204.1
EBIT ($mil)140.3110.3
Net Income ($mil)95.162.3


Balance Sheet Q4 FY16 Q4 FY15
Cash & Equiv. ($mil)1937.61892.5
Total Assets ($mil)11489.610913.8
Total Debt ($mil)2848.22457.0
Equity ($mil)3596.63638.3


Profitability Q4 FY16 Q4 FY15
Gross Profit Margin16.5815.29
EBITDA Margin16.5715.28
Operating Margin10.138.26
Sales Turnover0.490.49
Return on Assets3.63.26
Return on Equity11.529.8
Debt Q4 FY16 Q4 FY15
Current Ratio0.961.03
Debt/Capital0.440.4
Interest Expense28.325.8
Interest Coverage4.964.28


Share Data Q4 FY16 Q4 FY15
Shares outstanding (mil)178.33176.95
Div / share0.380.37
EPS0.530.35
Book value / share20.1720.56
Institutional Own % n/a n/a
Avg Daily Volume924773.01053240.0

Valuation


BUY. This stock's P/E ratio indicates a premium compared to an average of 24.29 for the Insurance industry and a discount compared to the S&P 500 average of 26.73. For additional comparison, its price-to-book ratio of 2.82 indicates valuation on par with the S&P 500 average of 2.98 and a premium versus the industry average of 1.82. The current price-to-sales ratio is below the S&P 500 average, but above the industry average. Upon assessment of these and other key valuation criteria, ARTHUR J GALLAGHER & CO proves to trade at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
AJG 24.51 Peers 24.29   AJG 16.30 Peers 11.33

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

AJG is trading at a valuation on par with its peers.

 

Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

AJG is trading at a significant premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
AJG 16.87 Peers 15.74   AJG 0.82 Peers 1.24

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

AJG is trading at a premium to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

AJG trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
AJG 2.82 Peers 1.82   AJG 13.72 Peers -9.45

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

AJG is trading at a significant premium to its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

AJG is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
AJG 1.81 Peers 1.45   AJG 3.75 Peers 14.99

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

AJG is trading at a premium to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

AJG significantly trails its peers on the basis of sales growth

 

 

Latest Stock Upgrades/Downgrades