We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Arthur J. Gallagher (AFG) Strategies Solid: Should You Hold?
Read MoreHide Full Article
Shares of Arthur J. Gallagher & Co. (AJG - Free Report) have outperformed the Zacks categorized Insurance Broker industry in the last three months. Shares gained 3.34%, compared to a 1.35% gain recorded by the industry.
Arthur J. Gallagher has witnessed positive organic growth for 20 straight quarters. It remains focused on tapping opportunities in the UK, Australia, New Zealand, Canada and the U.S.
Arthur J. Gallagher’s revenues are geographically diversified, with the company's robust domestic and international operations. About 65% of its revenues come from domestic operations, while its international business accounts for 35% of the top line. The company expects the cotribution from the international business to the total revenue to increase in the future, given the number and size of its non-U.S. acquisitions.
The Zacks Rank #3 (Hold) insurer’s inorganic story remains impressive backed by its strategic buyouts. The company intends to pursue smaller tuck-in mergers in 2017.
Also, the company’s dividend yield of 2.9% outshines the industry average of 1.9%. This makes the insurer an attractive pick.
Arthur J. Gallagher has beaten expectation in the last five quarters. However, our proven model does not conclusively state if the company will beat estimates in the to-be-reported quarter. This is because though a Zacks Rank #3 (Hold) increases the predictive power of an earnings beat, its Earnings ESP of 0.00% makes prediction difficult. The Zacks Consensus Estimate for the fourth quarter is currently pegged at 66 cents, translating to year-over-year growth of 14.4%. The company expects to record 15% earnings growth in 2016 on the back of operational strength. Management expects the employee benefit businesses to generate organic growth in the fourth quarter.
The stock's 2017 estimates rose by a cent in the last 30 days on the back of two upward revisions.
However, the stock seems expensive on the price to earnings basis. While the P/E ratio is 18.9, a premium of 25% to the industry average, its return on equity of 12.9% is lower than the industry average of 22.5%. Also, the price-earnings growth ratio, which determines the relative trade-off between the price of a stock, earnings generated per share and the company's expected growth, is 2.10, higher than the industry average of 1.78.
Stocks to Consider
Some better-ranked insurers include AXIS Capital Holdings, Ltd. (AXS - Free Report) , Arch Capital Group Ltd. (ACGL - Free Report) and Primerica, Inc. (PRI - Free Report) .
AXIS Capital offers specialty lines insurance and treaty reinsurance products worldwide. The company delivered positive surprises in all of the last four quarters with an average beat of 30.19%. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Arch Capital offers property, casualty, and mortgage insurance and reinsurance products worldwide. It delivered positive surprises in all of the last four quarters with an average beat of 9.27%. The stock carries a Zacks Rank #2 (Buy).
Primerica – a distributor of financial products to middle income households in the U.S. and Canada – delivered positive surprises in the trailing four quarters with an average beat of 6.4%. The company has Zacks Rank #2.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017? Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them>>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Arthur J. Gallagher (AFG) Strategies Solid: Should You Hold?
Shares of Arthur J. Gallagher & Co. (AJG - Free Report) have outperformed the Zacks categorized Insurance Broker industry in the last three months. Shares gained 3.34%, compared to a 1.35% gain recorded by the industry.
Arthur J. Gallagher has witnessed positive organic growth for 20 straight quarters. It remains focused on tapping opportunities in the UK, Australia, New Zealand, Canada and the U.S.
Arthur J. Gallagher’s revenues are geographically diversified, with the company's robust domestic and international operations. About 65% of its revenues come from domestic operations, while its international business accounts for 35% of the top line. The company expects the cotribution from the international business to the total revenue to increase in the future, given the number and size of its non-U.S. acquisitions.
The Zacks Rank #3 (Hold) insurer’s inorganic story remains impressive backed by its strategic buyouts. The company intends to pursue smaller tuck-in mergers in 2017.
Also, the company’s dividend yield of 2.9% outshines the industry average of 1.9%. This makes the insurer an attractive pick.
Arthur J. Gallagher has beaten expectation in the last five quarters. However, our proven model does not conclusively state if the company will beat estimates in the to-be-reported quarter. This is because though a Zacks Rank #3 (Hold) increases the predictive power of an earnings beat, its Earnings ESP of 0.00% makes prediction difficult. The Zacks Consensus Estimate for the fourth quarter is currently pegged at 66 cents, translating to year-over-year growth of 14.4%. The company expects to record 15% earnings growth in 2016 on the back of operational strength. Management expects the employee benefit businesses to generate organic growth in the fourth quarter.
The stock's 2017 estimates rose by a cent in the last 30 days on the back of two upward revisions.
However, the stock seems expensive on the price to earnings basis. While the P/E ratio is 18.9, a premium of 25% to the industry average, its return on equity of 12.9% is lower than the industry average of 22.5%. Also, the price-earnings growth ratio, which determines the relative trade-off between the price of a stock, earnings generated per share and the company's expected growth, is 2.10, higher than the industry average of 1.78.
Stocks to Consider
Some better-ranked insurers include AXIS Capital Holdings, Ltd. (AXS - Free Report) , Arch Capital Group Ltd. (ACGL - Free Report) and Primerica, Inc. (PRI - Free Report) .
AXIS Capital offers specialty lines insurance and treaty reinsurance products worldwide. The company delivered positive surprises in all of the last four quarters with an average beat of 30.19%. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Arch Capital offers property, casualty, and mortgage insurance and reinsurance products worldwide. It delivered positive surprises in all of the last four quarters with an average beat of 9.27%. The stock carries a Zacks Rank #2 (Buy).
Primerica – a distributor of financial products to middle income households in the U.S. and Canada – delivered positive surprises in the trailing four quarters with an average beat of 6.4%. The company has Zacks Rank #2.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017? Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them>>