The fair value of Arthur J Gallagher & Co (AJG) is $186.15. The current price ($338.27) indicates stock is overvalued by 44.97%.
* Note: Prices are in Million (M) USD.
These criteria used Company’s Cash, EBITDA and Debt balance to determines its fair value:
Cash : $14,990 M
Debt : $13,580 M
EBITDA : $3,630 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: 27.26
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:
Average Free Cash Flow: $742 M
Average Revenue: $4,949 M
Free Cash Flow to Revenue : 15 %
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:
Earnings Per Share (EPS): $12.41
Dividend Per Share (DPS): $2
Payout Ratio: 19%
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:
Average ROE: 12%
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: $338
52-Week Low: $228
Threshold Price (15% Above 52-Week Low): $262
Since Current price is not within 15% threshold, 0 point assigned.
This criteria used Company's Market Cap to determines its fair value:
Market Capitalization: $85,421 M
Since Market Cap is between 10B - 100B, 2 points assigned.
% Exposure to Total Portfolio
Based on the calculated score, we recommend do not exceed 3% exposure of Total Portfolio.
Value-Trade has assigned 20 points to above Arthur J Gallagher & Co (AJG) stock.
Twenty Years Avg PE 23, Fair Value PE 15, Industry Based PE is 12 and Growth based PE is 10. Based on these all values average assigned is 15.00.
Value-Trades has assined P/E value 15.00. Since current year earning per share is $12.41.
The fair value of Arthur J Gallagher & Co (AJG) stock should be (15.00 x $12.41) = $186.15
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