# Arthur J Gallagher & Co. (AJG.US)

Canonical: https://gigainvestors.com/s/AJG

Analysis as of: 2026-10-16T07:26:20.591Z. Financial observations: FY1996–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $250.10 per share; close as of 2026-10-15.

Estimated value: low $127.83 per share, central $145.45 per share, high $168.91 per share. Buy at or below the central value $145.45 per share. Valuation as of 2026-10-16T07:26:20.591Z; scenarios are not confidence intervals.

Expected annual return: 7.0% at the stated quote. About 7.0% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 1 revenue decline in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 1

- Years with a net loss: 0

- Operating margin variation: 0.28×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.08×

- FY2018: 0.09×

- FY2019: 0.10×

- FY2020: 0.14×

- FY2021: 0.18×

- FY2022: 0.20×

- FY2023: 0.18×

- FY2024: 0.20×

- FY2025: 0.18×

- LTM to Jun 2026: 0.17×

### moat: pass

- ROIC, median of available years: 23.0%

- ROIC, second-lowest year: 19.2%

- Typical minus recent gross margin: -15.6 pp

- Typical gross margin (annual median): 39.2%

- Recent gross margin (lower of latest and 3-year median): 54.8%

- Years with nonpositive capital: 0

- Capital spending / revenue: 1.7%

- ROIC including acquisitions, ten-year median: 10.7%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 20.3%

- FY2018: 21.5%

- FY2019: 19.2%

- FY2020: 23.2%

- FY2021: 23.9%

- FY2022: 27.6%

- FY2023: 22.8%

- FY2024: 28.0%

- FY2025: 15.4%

- LTM to Jun 2026: >100%

### economics: fail

- working capital as a share of revenue rose more than 10pp and ends positive

- Owner earnings / net income, 5-yr: 1.70×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $10B

- Net income, five-year total: $5.9B

- Return on incremental invested capital: >100%

- Working capital / revenue, annual change: 4.3 pp

- Working capital / revenue, change between three-year averages: 80.8 pp

- Working capital / revenue, final three-year average: 97.7%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.72×

- FY2022: 1.72×

- FY2023: 1.86×

- FY2024: 1.59×

- FY2025: 1.65×

### management: fail

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 21.5% vs 22.8%

- Per-share earnings: 2.22 to 5.74 (three-year endpoint medians)

- five-year and ten-year diluted share growth both above threshold

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 3.9%

- Ordinary dilution, 5-year annual growth: 5.7%

- Market cap gain: $57B

- Cumulative retained earnings: $4.9B

- Diluted shares, 10-year annual growth: 3.9%

- Diluted shares, 5-year annual growth: 5.7%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 12.6%

- Per-share value change: $3.53

- Per-share value, starting three-year median: $2.22

- Per-share value, ending three-year median: $5.74

- Buybacks concentrated in cheaper years (correlation): -0.50

- Average buyback yield: 0.4%

- Buyback history: 3 years

- Debt-funded buybacks: No

- Acquisition spending: $28B

- Cumulative net income, 10 years: $8.9B

- ROIC, first three-year median: 21.5%

- ROIC, last three-year median: 22.8%

Chart: Earnings per share; fiscal year observations.

- FY2016: $2.22

- FY2017: $2.62

- FY2018: $3.38

- FY2019: $3.49

- FY2020: $4.15

- FY2021: $4.26

- FY2022: $5.19

- FY2023: $4.42

- FY2024: $6.50

- FY2025: $5.74

### accounting: pass

- Sloan accruals: -0.6%

- Receivables to sales index (DSRI): 1.10×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 10.2%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.29×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 1.43×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -2.0%

- FY2017: -2.9%

- FY2018: -0.8%

- FY2019: -2.3%

- FY2020: -4.2%

- FY2021: -2.4%

- FY2022: -2.6%

- FY2023: -2.1%

- FY2024: -1.7%

- FY2025: -0.6%

## Holders

- [John Rogers](https://gigainvestors.com/AI): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Glenn Greenberg](https://gigainvestors.com/CCM): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [David Hoeft](https://gigainvestors.com/DAC): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Steven Romick](https://gigainvestors.com/FPA): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Andrew Adams](https://gigainvestors.com/MPF): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Robert Torray](https://gigainvestors.com/T): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 28% since May 2025 · "Arthur J. Gallagher Faces Margin Pressure Amid Integration Work, Oppenheimer Says" (finance.yahoo.com, Oct 2026) · sales +13%

Story as of 2026-10-16T09:58:15.909Z; price observation 2026-10-15.

Price needs cash profits to grow 7.7% a year for ten years

- 2025-08-01: Earnings call transcript: Arthur J. Gallagher Q2 2025 misses EPS forecast, stock declines ([investing.com](https://www.investing.com/news/transcripts/earnings-call-transcript-arthur-j-gallagher-q2-2025-misses-eps-forecast-stock-declines-93CH-4164804))

- 2026-07-31: AJG Q2 Earnings Meet Estimates, Revenues Miss on Higher Expenses ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/ajg-q2-earnings-meet-estimates-153000216.html))

- 2026-10-07: Arthur J. Gallagher Faces Margin Pressure Amid Integration Work, Oppenheimer Says ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/arthur-j-gallagher-faces-margin-162632771.html))

### Sales · FY2025–2026

sales +13%; source https://www.sec.gov/Archives/edgar/data/354190/000162828026008662/ajg-20251231.htm; observed 2026-02-17.

- FY2017: $6.2B 

- FY2018: $6.9B 

- FY2019: $7.2B 

- FY2020: $7.0B 

- FY2021: $8.2B 

- FY2022: $8.6B 

- FY2023: $10B 

- FY2024: $12B 

- FY2025: $14B 

- FY2026: $16B 

### Gross margin · FY2026

gross margin 74.6%; source https://www.sec.gov/Archives/edgar/data/354190/000162828026008662/ajg-20251231.htm; observed 2026-02-17.

- FY2017: 28.0% 

- FY2018: 28.0% 

- FY2019: 31.8% 

- FY2020: 35.7% 

- FY2021: 36.2% 

- FY2022: 42.1% 

- FY2023: 42.1% 

- FY2024: 42.2% 

- FY2025: 54.8% 

- FY2026: 74.6% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in insurance brokers; annual sales are USD 13.9 billion.

- Source: https://www.sec.gov/Archives/edgar/data/354190/000162828026008662/ajg-20251231.htm#000162828026008662 (filed 2026-02-17); FY2025: revenue 13942000000; grossProfit 7633300000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); AJG.US: Arthur J. Gallagher & Co., together with its subsidiaries, provides insurance and reinsurance brokerage, consulting, and third-party property/casualty claims settlement and administration services to entities and individuals worldwide. The company operates in Brokerage and Risk Management segments. Its Brokerage segment offers retail and wholesale insurance and reinsurance brokerage services; assists retail brokers and other non-affiliated brokers in the placement of specialized and hard-to-place insurance; and acts as a brokerage wholesaler, managing general agent, and managing general underwriter for distributing specialized insurance coverages to underwriting enterprises. This segment performs activities, including marketing, underwriting, issuing policies, collecting premiums, appointing and supervising other agents, paying claims, and negotiating reinsurance; and offers services in the areas of insurance and reinsurance placement, risk of loss management, and management of employer sponsored benefit programs. The Risk Management segment provides contract claim settlement and administration services; and claims management, loss control consulting, and insurance property appraisal services. The company offers its services through a network of correspondent brokers and consultants. It serves commercial, industrial, public, religious, and nonprofit entities, as well as underwriting enterprises. The company was founded in 1927 and is headquartered in Rolling Meadows, Illinois.

### Why customers stay

Margins ranged from 42.1% to 54.8% during 2023–25; it earns 23% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2023: grossProfit / revenue = 42.1%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2024: grossProfit / revenue = 42.2%.

- Source: https://www.sec.gov/Archives/edgar/data/354190/000162828026008662/ajg-20251231.htm (filed 2026-02-17); FY2025: grossProfit / revenue = 54.8%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); 10-year return on capital observations [[2017,0.20272734480298105],[2018,0.2145663132278811],[2019,0.19225217794731686],[2020,0.23163318100757732],[2021,0.23911160800747566],[2022,0.276061578566208],[2023,0.22804990406653874],[2024,0.2804563162554886],[2025,0.1535521816478815],[2026,1.6111530498272055]]; median 0.22984154253705802. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid dividends in 10 of 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2016: growth capex 0; upkeep 217800000; cash acquisitions 327300000; owner earnings 529800000. Growth capex plus acquisitions / owner earnings = 0.6177802944507361.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2017: growth capex 0; upkeep 129200000; owner earnings 737900000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2018: growth capex 0; upkeep 124400000; owner earnings 928100000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2019: growth capex 0; upkeep 138800000; owner earnings 1004400000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2020: growth capex 0; upkeep 99300000; owner earnings 1639600000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2021: growth capex 0; upkeep 128600000; owner earnings 1562100000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2022: growth capex 0; upkeep 182700000; owner earnings 1918300000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2023: growth capex 0; upkeep 193600000; owner earnings 1806700000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2024: growth capex 0; upkeep 141900000; owner earnings 2323500000. Growth capex / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/354190/000162828026008662/ajg-20251231.htm (filed 2026-02-17); FY2025: growth capex 0; upkeep 145000000; owner earnings 2470900000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); Dividend observations: [[2016,272200000],[2017,282700000],[2018,301800000],[2019,321100000],[2020,347400000],[2021,392000000],[2022,429500000],[2023,473600000],[2024,525400000],[2025,667000000]]. Zero only counted when supported by a complete cash-flow statement.

### Are managers owners

Insiders own 0.9% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); AJG.US SharesStats.PercentInsiders = 0.8670000000000001 percentage points; cache date 2026-10-16.

### What could break it

"We face significant competitive pressures in each of our businesses." (SEC filing, Feb 2026)

- Source: https://www.sec.gov/Archives/edgar/data/354190/000162828026008662/ajg-20251231.htm (filed 2026-02-17); We face significant competitive pressures in each of our businesses.

### What the price says

The price assumes cash profits grow 7.7% yearly over ten years; actual growth was 11%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); Ten-year compound average after fade. Initial solved rate 0.09753562227082993. Price 250.1; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 3.3342532568107193 → FY2025 9.498566123613214. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $48.23 per share

- 2016-11: $50.35 per share

- 2016-12: $51.96 per share

- 2017-01: $53.83 per share

- 2017-02: $56.95 per share

- 2017-03: $56.54 per share

- 2017-04: $55.81 per share

- 2017-05: $56.73 per share

- 2017-06: $57.25 per share

- 2017-07: $58.79 per share

- 2017-08: $57.90 per share

- 2017-09: $61.55 per share

- 2017-10: $63.33 per share

- 2017-11: $65.83 per share

- 2017-12: $63.28 per share

- 2018-01: $68.32 per share

- 2018-02: $69.11 per share

- 2018-03: $68.73 per share

- 2018-04: $69.99 per share

- 2018-05: $66.28 per share

- 2018-06: $65.28 per share

- 2018-07: $71.35 per share

- 2018-08: $72.14 per share

- 2018-09: $74.44 per share

- 2018-10: $74.01 per share

- 2018-11: $77.07 per share

- 2018-12: $73.70 per share

- 2019-01: $74.71 per share

- 2019-02: $80.28 per share

- 2019-03: $78.10 per share

- 2019-04: $83.62 per share

- 2019-05: $84.20 per share

- 2019-06: $87.59 per share

- 2019-07: $90.43 per share

- 2019-08: $90.71 per share

- 2019-09: $89.57 per share

- 2019-10: $91.22 per share

- 2019-11: $93.27 per share

- 2019-12: $95.23 per share

- 2020-01: $102.57 per share

- 2020-02: $97.49 per share

- 2020-03: $81.51 per share

- 2020-04: $78.50 per share

- 2020-05: $94.28 per share

- 2020-06: $97.49 per share

- 2020-07: $107.49 per share

- 2020-08: $105.30 per share

- 2020-09: $105.58 per share

- 2020-10: $103.71 per share

- 2020-11: $115.41 per share

- 2020-12: $123.71 per share

- 2021-01: $115.41 per share

- 2021-02: $119.80 per share

- 2021-03: $124.77 per share

- 2021-04: $144.95 per share

- 2021-05: $146.61 per share

- 2021-06: $140.08 per share

- 2021-07: $139.31 per share

- 2021-08: $143.62 per share

- 2021-09: $148.65 per share

- 2021-10: $167.67 per share

- 2021-11: $162.90 per share

- 2021-12: $169.67 per share

- 2022-01: $157.94 per share

- 2022-02: $158.19 per share

- 2022-03: $174.60 per share

- 2022-04: $168.49 per share

- 2022-05: $161.94 per share

- 2022-06: $163.04 per share

- 2022-07: $178.99 per share

- 2022-08: $181.57 per share

- 2022-09: $171.22 per share

- 2022-10: $187.08 per share

- 2022-11: $199.11 per share

- 2022-12: $188.54 per share

- 2023-01: $195.72 per share

- 2023-02: $187.35 per share

- 2023-03: $191.31 per share

- 2023-04: $208.06 per share

- 2023-05: $200.33 per share

- 2023-06: $219.57 per share

- 2023-07: $214.80 per share

- 2023-08: $230.48 per share

- 2023-09: $227.93 per share

- 2023-10: $235.49 per share

- 2023-11: $249.00 per share

- 2023-12: $224.88 per share

- 2024-01: $232.16 per share

- 2024-02: $243.93 per share

- 2024-03: $250.04 per share

- 2024-04: $234.69 per share

- 2024-05: $253.33 per share

- 2024-06: $259.31 per share

- 2024-07: $283.49 per share

- 2024-08: $292.57 per share

- 2024-09: $281.37 per share

- 2024-10: $281.20 per share

- 2024-11: $312.24 per share

- 2024-12: $283.85 per share

- 2025-01: $301.82 per share

- 2025-02: $337.74 per share

- 2025-03: $345.24 per share

- 2025-04: $320.69 per share

- 2025-05: $347.44 per share

- 2025-06: $320.12 per share

- 2025-07: $287.25 per share

- 2025-08: $302.75 per share

- 2025-09: $309.74 per share

- 2025-10: $249.49 per share

- 2025-11: $247.62 per share

- 2025-12: $258.79 per share

- 2026-01: $249.37 per share

- 2026-02: $228.20 per share

- 2026-03: $216.58 per share

- 2026-04: $206.40 per share

- 2026-05: $201.11 per share

- 2026-06: $229.57 per share

- 2026-07: $249.42 per share

- 2026-08: $262.15 per share

- 2026-09: $228.11 per share

- 2026-10: $232.90 per share

## Annual estimated value (USD per share)

- FY2016: low $37.49 per share, central $42.66 per share, high $49.54 per share

- FY2017: low $40.26 per share, central $45.81 per share, high $53.20 per share

- FY2018: low $44.37 per share, central $50.49 per share, high $58.64 per share

- FY2019: low $49.13 per share, central $55.91 per share, high $64.92 per share

- FY2020: low $51.90 per share, central $59.06 per share, high $68.58 per share

- FY2021: low $58.85 per share, central $66.96 per share, high $77.76 per share

- FY2022: low $82.84 per share, central $94.27 per share, high $109.47 per share

- FY2023: low $108.85 per share, central $142.07 per share, high $166.18 per share

- FY2024: low $112.89 per share, central $128.46 per share, high $149.18 per share

- FY2025: low $111.47 per share, central $126.84 per share, high $147.30 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

Prior published observations retained from 2026-10-15T06:31:56.394Z where newer inputs omit a numeric field or fiscal period.

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/354190/000162828026008662/ajg-20251231.htm); period 2025-12-31, filed 2026-02-17.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.