* Note: Prices are in Million (M) USD.
Description:
Arthur J. Gallagher & Co. (AJG) is an American global insurance brokerage and risk management services firm headquartered in Rolling Meadows, Illinois.
These criteria used Company's Cash, EBITDA and Debt balance to determines its fair value:
Cash : $14,300 M
Debt : $13,297 M
EBITDA : $3,497 M
Since Cash is greater than Total Debt, 5 points assigned.
This criteria used industry in which company operates:
Sector: Financial services
Industry: Insurance brokers
Based on industry, 3 points assigned.
This criteria used Company's Price To Earning (P/E) Ratio to determines its fair value:
Forward PE Ratio: 28.51
Since Forward PE Ratio is between 25 - 35, 1 point assigned.
This criteria used Company's ability to convert Sales into free cash flow to determine fair value:
Using last 20 overlapping fiscal years (max 20).Average Free Cash Flow: $742 M
Average Revenue: $4,949 M
Revenue Converted To Free Cash Flow (%): 15.0%
Since Free Cash Flow (FCF) to Revenue percentage is less than 15, 1 point assigned.
This criteria used company's growth potential to calculate its fair value:
Latest Revenue (2024-12-31): $11,555 M
Revenue 4 Years Ago (2020-12-31): $7,004 M
Last 5 Years Average Revenue Growth: 13%
Since Revenue Growth is between 10 - 15, 3 points assigned.
This criteria used Company's ability to buy back its own share:
Latest Share Count (2024-12-31): $224 M
Share Count 5 Years Ago (2020-12-31): $195 M
Company is not buying back its own shares, 0 points assigned.
This criteria used Company's dividend payout ratio to determine its fair value:
Next Year Earnings Per Share (EPS): $11.14
Trailing 12-Month Earnings Per Share (EPS): $10.10
Average Earnings Per Share (EPS): $10.62
Dividend Per Share (DPS): $3
Payout Ratio: 24%
Dividend Yield: 1%
Since company Payout Ratio is less than 50, 2 points assigned.
Since Dividend Yield is less than 1, 0 point assigned.
This criteria used Company's Return On Equity (ROE%) to determine its fair value:
Using last 20 valid ROE years (max 20).Average ROE: 11.8%
Since Average ROE is between 10 - 20, 3 points assigned.
This criteria used Company's current price to its 52 week low price to determines its fair value:
Current Price: $303
52-Week Low: $273
Threshold Price (15% Above 52-Week Low): $314
Since Current price is within 15% threshold, 5 points assigned.
This criteria used Company's Market Cap to determines its fair value:
Market Capitalization: $75,043 M
Since Market Cap is between 10B - 100B, 2 points assigned.
% Exposure to Total Portfolio
Based on the market cap, we recommend do not exceed 3% exposure of Total Portfolio.
Value-Trade has assigned 25 points to above Arthur J Gallagher & Co (AJG) stock.
Last 20 Years Avg PE 21.89, Fair Value PE 15, Industry Based PE 12, Growth Based PE 12, RCFC Based PE 21.99, ROE Based PE 19.46, Risk-Free Anchored PE (25% MoS) 17.08. Based on these 7 values, average assigned is 17.06. Value-Trades has assined P/E value 17.06. Since an average (Current Year EPS + Next Year EPS) earning per share is $10.62.
The fair value of Arthur J Gallagher & Co (AJG) stock should be (17.06 x $10.62) = $181.18.
