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Should Arthur J Gallagher (AJG) Stock Be in Your Portfolio?
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On Aug 12, 2016, we issued an updated report on Arthur J Gallagher & Co. (AJG - Free Report) .
Arthur J Gallagher reported strong second-quarter 2016 earnings that beat the Zacks Consensus Estimate and improved year over year on impressive performance by the brokerage segment. The company has displayed positive organic growth for 20 straight quarters. With respect to earnings surprise, the insurance broker delivered positive surprise in each of the last four quarters.
The inorganic growth of Arthur J Gallagher has been quite impressive. Given prudent acquisitions, the company evolved from a small retail presence in Australia, Canada and New Zealand to one of the top five brokers in the world. These initiatives have not only expanded the company’s domestic and international footprint, but also added to its product and service portfolio.
A solid operational performance has helped Arthur J Gallagher to build a strong capital position, which enables it to engage in shareholders friendly moves. The company’s current dividend yield of 3.07% is better than the industry average of 1.92%. It has 7.7 million shares remaining under its repurchase authorization. Factors like these make the stock an attractive pick for yield-seeking investors.
However, the company has been experiencing an increase in expenses due to higher compensation and operating costs. A higher debt level is also increasing its interest expenses which in turn, has been restricting margin expansion to some extent.
Also, multiple buyouts by Arthur J Gallagher involve integration costs, which the company estimates between 6 cents and 7 cents in the later half of 2016.
The Zacks Consensus Estimate for 2016 moved up 10.8% to $2.77 per share year over year. For 2017, Zacks Consensus Estimate moved up 9.9% to $3.05 per share year over year.
Some notable insurers are Argo Group International Holdings, Ltd. , Allied World Assurance Company Holdings, AG (AWH - Free Report) and Erie Indemnity Company (ERIE - Free Report) .
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Should Arthur J Gallagher (AJG) Stock Be in Your Portfolio?
On Aug 12, 2016, we issued an updated report on Arthur J Gallagher & Co. (AJG - Free Report) .
Arthur J Gallagher reported strong second-quarter 2016 earnings that beat the Zacks Consensus Estimate and improved year over year on impressive performance by the brokerage segment. The company has displayed positive organic growth for 20 straight quarters. With respect to earnings surprise, the insurance broker delivered positive surprise in each of the last four quarters.
The inorganic growth of Arthur J Gallagher has been quite impressive. Given prudent acquisitions, the company evolved from a small retail presence in Australia, Canada and New Zealand to one of the top five brokers in the world. These initiatives have not only expanded the company’s domestic and international footprint, but also added to its product and service portfolio.
A solid operational performance has helped Arthur J Gallagher to build a strong capital position, which enables it to engage in shareholders friendly moves. The company’s current dividend yield of 3.07% is better than the industry average of 1.92%. It has 7.7 million shares remaining under its repurchase authorization. Factors like these make the stock an attractive pick for yield-seeking investors.
However, the company has been experiencing an increase in expenses due to higher compensation and operating costs. A higher debt level is also increasing its interest expenses which in turn, has been restricting margin expansion to some extent.
Also, multiple buyouts by Arthur J Gallagher involve integration costs, which the company estimates between 6 cents and 7 cents in the later half of 2016.
The Zacks Consensus Estimate for 2016 moved up 10.8% to $2.77 per share year over year. For 2017, Zacks Consensus Estimate moved up 9.9% to $3.05 per share year over year.
Some notable insurers are Argo Group International Holdings, Ltd. , Allied World Assurance Company Holdings, AG (AWH - Free Report) and Erie Indemnity Company (ERIE - Free Report) .
Want the latest recommendations from Zacks Investment Research? Today, you can download 7Best Stocks for the Next 30 Days. Click to get this free report >>