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Arthur J. Gallagher (AJG) Up 14% in a Year: More Room to Run?
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Shares of Arthur J. Gallagher & Co. (AJG - Free Report) have gained 13.5% in a year against the industry’s decline of 0.9%. The Finance sector and the Zacks S&P 500 composite declined 11.6% and 10.9%, respectively, in the same time frame. With a market capitalization of $38.2 billion, the average volume of shares traded in the last three months was about 0.8 million.
The solid performance of the Brokerage and Risk Management segments, strategic buyouts to capitalize on growing market opportunities, effective capital deployment and upbeat guidance continue to drive AJG.
This Zacks Rank #2 (Buy) insurance broker has a stellar track record of beating estimates in the last 18 quarters.
Image Source: Zacks Investment Research
Can AJG Retain the Momentum?
The Zacks Consensus Estimate for Arthur J. Gallagher’s 2022 earnings is pegged at $7.77, indicating an increase of 41.8% on 3.5% higher revenues of $8.4 billion. The consensus estimate for 2023 earnings is pegged at $8.64, indicating an increase of 11.2% on 11.1% higher revenues of $9.3 billion.
The long-term earnings growth rate is currently pegged at 11.8%, better than the industry.
AJG boasts being the largest property/casualty third-party claims administrator and the fourth largest insurance broker globally based on revenues, AJG’s top line should continue to benefit from a sustained solid operational performance at its Brokerage and Risk Management segments. It estimates organic revenue growth of about 10% in 2023.
AJG has an impressive inorganic growth story. The insurance broker has quite a strong pipeline with about $300 million of revenues, associated with almost 45 term sheets, either agreed upon or being prepared. AJG estimates M&A capacity at more than $3 billion through 2023.
Banking on its sturdy operational performance, AJG expects to generate solid cash flow in 2023. Arthur J. Gallagher increased dividends at a four-year CAGR (2020-2023) of 5.1%, with dividends currently yielding 1.2%. AJG also has a $1.5 billion share buyback authorization under its kitty.
AJG expects a strong 2023 performance, given a sturdy organic outlook, margin expansion opportunities and an impressive M&A pipeline.
Other Stocks to Consider
Some other top-ranked stocks from the insurance industry are Brighthouse Financial (BHF - Free Report) , Primerica (PRI - Free Report) and Voya Financial (VOYA - Free Report) .
Brighthouse Financial’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters, the average beat being 2.07%. BHF sports Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for BHF’s 2023 and 2024 earnings per share indicates year-over-year increases of 29.4% and 12.6%, respectively. In a year, its shares have dropped 4.1%.
Primerica’s earnings surpassed the Zacks Consensus Estimate in two of the last four quarters while missed in the other two. PRI sports a Zacks Rank #1.
The Zacks Consensus Estimate for PRI’s 2023 and 2024 earnings per share indicates year-over-year increases of 18.3% and 8.9%, respectively. In a year, shares have rallied 27.3%.
Voya Financial’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average earnings surprise being 38.68%. VOYA carries Zacks Rank #2.
The Zacks Consensus Estimate for VOYA’s 2023 and 2024 earnings per share indicates year-over-year increases of 6.1% and 14%, respectively. In a year, its shares have gained 4.6%.
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Arthur J. Gallagher (AJG) Up 14% in a Year: More Room to Run?
Shares of Arthur J. Gallagher & Co. (AJG - Free Report) have gained 13.5% in a year against the industry’s decline of 0.9%. The Finance sector and the Zacks S&P 500 composite declined 11.6% and 10.9%, respectively, in the same time frame. With a market capitalization of $38.2 billion, the average volume of shares traded in the last three months was about 0.8 million.
The solid performance of the Brokerage and Risk Management segments, strategic buyouts to capitalize on growing market opportunities, effective capital deployment and upbeat guidance continue to drive AJG.
This Zacks Rank #2 (Buy) insurance broker has a stellar track record of beating estimates in the last 18 quarters.
Image Source: Zacks Investment Research
Can AJG Retain the Momentum?
The Zacks Consensus Estimate for Arthur J. Gallagher’s 2022 earnings is pegged at $7.77, indicating an increase of 41.8% on 3.5% higher revenues of $8.4 billion. The consensus estimate for 2023 earnings is pegged at $8.64, indicating an increase of 11.2% on 11.1% higher revenues of $9.3 billion.
The long-term earnings growth rate is currently pegged at 11.8%, better than the industry.
AJG boasts being the largest property/casualty third-party claims administrator and the fourth largest insurance broker globally based on revenues, AJG’s top line should continue to benefit from a sustained solid operational performance at its Brokerage and Risk Management segments. It estimates organic revenue growth of about 10% in 2023.
AJG has an impressive inorganic growth story. The insurance broker has quite a strong pipeline with about $300 million of revenues, associated with almost 45 term sheets, either agreed upon or being prepared. AJG estimates M&A capacity at more than $3 billion through 2023.
Banking on its sturdy operational performance, AJG expects to generate solid cash flow in 2023. Arthur J. Gallagher increased dividends at a four-year CAGR (2020-2023) of 5.1%, with dividends currently yielding 1.2%. AJG also has a $1.5 billion share buyback authorization under its kitty.
AJG expects a strong 2023 performance, given a sturdy organic outlook, margin expansion opportunities and an impressive M&A pipeline.
Other Stocks to Consider
Some other top-ranked stocks from the insurance industry are Brighthouse Financial (BHF - Free Report) , Primerica (PRI - Free Report) and Voya Financial (VOYA - Free Report) .
Brighthouse Financial’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters, the average beat being 2.07%. BHF sports Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for BHF’s 2023 and 2024 earnings per share indicates year-over-year increases of 29.4% and 12.6%, respectively. In a year, its shares have dropped 4.1%.
Primerica’s earnings surpassed the Zacks Consensus Estimate in two of the last four quarters while missed in the other two. PRI sports a Zacks Rank #1.
The Zacks Consensus Estimate for PRI’s 2023 and 2024 earnings per share indicates year-over-year increases of 18.3% and 8.9%, respectively. In a year, shares have rallied 27.3%.
Voya Financial’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average earnings surprise being 38.68%. VOYA carries Zacks Rank #2.
The Zacks Consensus Estimate for VOYA’s 2023 and 2024 earnings per share indicates year-over-year increases of 6.1% and 14%, respectively. In a year, its shares have gained 4.6%.