Arthur J. Gallagher & Co

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AJG : NYSE : Financial
$60.96 up 0.29 | 0.48%
Today's Range: 60.507 - 61.03
Avg. Daily Volume: 730900.0
09/22/17 - 3:59 PM ET

Financial Analysis


ARTHUR J GALLAGHER & CO's gross profit margin for the second quarter of its fiscal year 2017 has decreased when compared to the same period a year ago. The company has grown sales and net income during the past quarter when compared with the same quarter a year ago, however, it was unable to keep up with the growth of the average competitor within its industry. ARTHUR J GALLAGHER & CO has average liquidity. Currently, the Quick Ratio is 1.04 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

During the same period, stockholders' equity ("net worth") has increased by 6.80% from the same quarter last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face financial difficulties in the near future.

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Income Statement Q2 FY17 Q2 FY16
Net Sales ($mil)1563.41427.1
EBITDA ($mil)300.3300.1
EBIT ($mil)205.0211.5
Net Income ($mil)171.9150.0


Balance Sheet Q2 FY17 Q2 FY16
Cash & Equiv. ($mil)2068.91842.0
Total Assets ($mil)12569.611384.3
Total Debt ($mil)3112.82730.6
Equity ($mil)3844.73599.9


Profitability Q2 FY17 Q2 FY16
Gross Profit Margin19.2121.03
EBITDA Margin19.221.02
Operating Margin13.1114.82
Sales Turnover0.460.48
Return on Assets3.543.44
Return on Equity11.5810.89
Debt Q2 FY17 Q2 FY16
Current Ratio1.051.02
Debt/Capital0.450.43
Interest Expense31.627.2
Interest Coverage6.497.78


Share Data Q2 FY17 Q2 FY16
Shares outstanding (mil)180.16177.03
Div / share0.390.38
EPS0.950.84
Book value / share21.3420.33
Institutional Own % n/a n/a
Avg Daily Volume719199.0911320.0

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 49.29 for the Insurance industry and a value on par with the S&P 500 average of 24.88. For additional comparison, its price-to-book ratio of 2.81 indicates valuation on par with the S&P 500 average of 3.10 and a premium versus the industry average of 1.86. The current price-to-sales ratio is below the S&P 500 average, but above the industry average.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
AJG 24.19 Peers 49.29   AJG 15.75 Peers 12.46

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

AJG is trading at a significant discount to 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 17.96 Peers 15.46   AJG 0.82 Peers 1.93

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 significant 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 2.81 Peers 1.86   AJG 12.72 Peers 207.04

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.

 

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

However, AJG is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
AJG 1.85 Peers 1.49   AJG 5.91 Peers 11.38

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

 

 

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