AJG
Arthur J. Gallagher & Co. · Financials · Insurance Brokers
$233.92
52w 190.75 – 304.57
20y monthly, adjusted
Mkt cap
$60.0B
P/E
39.0
P/FCF
32.6
FCF yield
3.1%
ROE
6.4%
Shldr yield
1.1%
div 1.1% + bb 0.0%
What today's price assumes
At $60.0B, the market is pricing in 14.4% annual free-cash-flow growth for the next decade (10% discount rate, 2.5% terminal growth). Over the last ten years, FCF actually grew 11.8% per year — the price asks for acceleration beyond the historical record.
Simple DCF per-share range: $106 · $188 · $234 (4% / base / optimistic growth). An estimate, not a target.
Historical multiple lens
At its own median P/OCF of 12.8× across 17 years, AJG would trade near $96/share (25th–75th percentile: $75–$165); it trades at 31.1× today.
Assumes the historical multiple regime persists — re-ratings can be permanent.
Growth record
Compound annual growth rates from as-filed 10-K data, split-adjusted
Rev 3y
+17.7%
Rev 5y
+14.8%
Rev 10y
+10.0%
EPS 5y
+6.4%
EPS 10y
+10.8%
FCF 5y
+0.9%
FCF 10y
+11.8%
Fundamentals
Fiscal 2008–2025, from SEC filings
Revenue
Net income
Free cash flow
Diluted shares (lower is better)
Margins
Capital returned (dividends + buybacks)
Cash vs long-term debt
Quarterly
Discrete quarters from 10-Q filings; Q4 derived as fiscal year minus Q1–Q3. OCF is unwound from the year-to-date figures 10-Qs report. Compare to the same quarter a year ago — most businesses are seasonal.
Revenue by quarter
Net income by quarter
| Quarter | Revenue | YoY | Net income | YoY | EPS | OCF |
|---|---|---|---|---|---|---|
| Q2'26 | $4.0B | +24.2% | $324.0M | −12.0% | 1.25 | $10.0M |
| Q1'26 | $4.8B | +27.7% | $822.0M | +16.8% | 3.16 | $957.0M |
| Q4'25 * | $3.6B | +33.6% | $149.3M | −42.3% | 0.58 | $753.0M |
| Q3'25 | $3.4B | +19.9% | $272.7M | −12.8% | 1.04 | $729.0M |
| Q2'25 | $3.2B | +16.1% | $368.0M | +29.9% | 1.40 | −$424.0M |
| Q1'25 | $3.7B | +14.4% | $704.0M | +15.7% | 2.72 | $872.0M |
| Q4'24 * | $2.7B | +11.7% | $258.6M | — | 1.10 | $739.4M |
| Q3'24 | $2.8B | +12.6% | $312.6M | +11.4% | 1.39 | $934.8M |
| Q2'24 | $2.8B | +13.7% | $283.4M | +20.9% | 1.27 | $119.5M |
| Q1'24 | $3.3B | +20.3% | $608.4M | +25.1% | 2.74 | $789.3M |
| Q4'23 * | $2.4B | +19.9% | −$31.7M | −123.4% | -0.17 | $693.9M |
| Q3'23 | $2.5B | +21.9% | $280.7M | +9.7% | 1.28 | $897.2M |
| Q2'23 | $2.4B | +19.5% | $234.5M | −17.5% | 1.07 | $12.4M |
Track record
Compound annual growth by period. For debt and share count, negative is the good direction.
| Series | 3y | 5y | 10y | 15y |
|---|---|---|---|---|
| Revenue | +17.7% | +14.8% | +10.0% | +14.4% |
| Operating cash flow | +11.6% | +1.3% | +10.9% | +15.3% |
| Free cash flow | +13.9% | +0.9% | +11.8% | +15.5% |
| EPS (diluted) | +3.4% | +6.4% | +10.8% | +8.6% |
| Equity | +36.6% | +30.4% | +20.4% | +22.5% |
| LT debt | +29.6% | +23.2% | +19.3% | +22.9% |
| Diluted shares | +6.8% | +6.0% | +4.0% | +6.1% |
| Stock price | +0.7% | +7.9% | +18.9% | +16.9% |
$100, 3 years ago
$102vs $192 in SPY
0.7% vs 24.4%/yr
$100, 5 years ago
$147vs $181 in SPY
7.9% vs 12.6%/yr
$100, 10 years ago
$565vs $428 in SPY
18.9% vs 15.6%/yr
$100, 15 years ago
$1,045vs $803 in SPY
16.9% vs 14.9%/yr
The $1 test — market value created per $1 of earnings retained (Buffett's hurdle: at least $1)
Last 5 years
$12.34
$42.7B created / $3.5B retained
Last 10 years
$11.76
$58.0B created / $4.9B retained
Quality & capital discipline
Cash-based returns and how management deploys capital
Cash ROIC
5.4%
OCF ÷ (equity + debt)
OCF / EV yield
2.8%
MC vs 10× OCF
3.02
≤1 = priced under 10× OCF
Debt / FCF
6.8y
SBC / FCF
2.7%
Owner earnings
$1.7B
OCF − capex − SBC
OE yield
3.0%
Share count 5y
+6.0%
per year; negative = buybacks
Growth engine (5y): reinvested 259.9% of operating cash flow at an incremental return of 0.5% — an organically fundable growth rate of about 1.3% per year (growth ≈ reinvestment rate × incremental ROIC).
Checklist
13 of 24 checks pass · 54%. Checks with structurally missing inputs are excluded.
Growth & Consistency
5/7
- pass
Revenue growth
14.8% · 5y CAGR ≥ 5%
- pass
EPS growth
6.4% · 5y CAGR ≥ 5%
- fail
FCF growth
0.9% · 5y CAGR ≥ 5%
- pass
Revenue rises consistently
8 of 9 · up in ≥ 7 of last 10 years
- pass
FCF consistently positive
10 of 10 · positive in ≥ 8 of last 10 years
- pass
Profitable every year
10 of 10 · net income > 0 in ≥ 8 of last 10
- fail
Cash flow keeps up with sales
1.3% vs 14.8% · OCF CAGR ≥ 0.9× revenue CAGR
Profitability
3/5
- pass
Net margin
10.7% · ≥ 8%
- na
Operating margin
— · ≥ 10%
- na
Gross margin stable or rising
— · no drop > 2 pts over 3y
- fail
Return on equity
6.4% · ≥ 12%
- fail
Cash ROIC
5.4% · ≥ 12%
- pass
FCF margin
12.8% · ≥ 5%
- pass
Earnings back their cash
OCF $1.9B vs NI $1.5B · OCF ≥ net income (latest FY)
Balance Sheet
2/4
- fail
Debt payable from cash flow
6.8y · LT debt ≤ 3× FCF
- fail
Cash cushion
12% · cash ≥ 50% of LT debt
- pass
Leverage
0.52 · LT debt ≤ 1.5× equity
- pass
Equity positive and compounding
$23.3B · equity > 0 and grew over ~5y
- na
Interest burden
— · interest ≤ 15% of operating income
Capital Allocation
2/4
- fail
Share count flat or shrinking
6.0% · ≤ +0.5%/yr over ~5y
- pass
Stock comp restrained
3% · SBC ≤ 15% of FCF
- pass
Distributions funded by FCF
37% · dividends + buybacks ≤ 100% of FCF
- fail
Repurchases are a habit
3 of 10 · buybacks in ≥ 5 of last 10 years
Valuation Discipline
1/4
- pass
FCF yield
3.1% · ≥ 3%
- fail
Earnings multiple
39.0 · P/E ≤ 25
- fail
Price asks less than history delivered
14.4% vs 11.8% · implied FCF growth ≤ historical FCF CAGR
- fail
Shareholder yield
1.1% · dividends + buybacks ≥ 2% of market cap
Red flags
Mechanical checks — a flag is a question to investigate, not a verdict
Heavy debt load
Long-term debt exceeds 5 years of free cash flow.
Shareholder dilution
Diluted share count has grown by more than 2% per year over ~5 years.
Financial data
As filed in 10-Ks; per-share figures split-adjusted. $ in millions.
| FY | Revenue | Gross profit | Op income | Net income | EPS | OCF | CapEx | FCF | Dividends | Buybacks | SBC | Cash | LT debt | Equity | Shares |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 | 13,942 | — | — | 1,494 | 5.74 | 1,930 | 145 | 1,785 | 667 | — | 49 | 1,396 | 12,104 | 23,321 | 256 |
| 2024 | 11,555 | — | — | 1,463 | 6.50 | 2,583 | 142 | 2,441 | 525 | — | 42 | 14,987 | 12,732 | 20,154 | 221 |
| 2023 | 10,072 | — | — | 970 | 4.42 | 2,032 | 194 | 1,838 | 474 | — | 31 | 971 | 7,006 | 10,775 | 215 |
| 2022 | 8,551 | — | — | 1,114 | 5.19 | 1,390 | 183 | 1,207 | 430 | — | 24 | 738 | 5,563 | 9,144 | 210 |
| 2021 | 8,209 | — | — | 907 | 4.37 | 1,392 | 129 | 1,264 | 392 | — | 13 | 403 | 5,810 | 8,508 | 203 |
| 2020 | 7,004 | — | — | 819 | 4.20 | 1,807 | 99 | 1,708 | 347 | — | 14 | 665 | 4,266 | 6,186 | 191 |
| 2019 | 7,195 | — | — | 669 | 3.52 | 1,191 | 139 | 1,052 | 321 | — | 14 | 605 | 3,816 | 5,156 | 186 |
| 2018 | 6,934 | — | — | 634 | 3.40 | 765 | 124 | 641 | 302 | 11 | 14 | 607 | 3,091 | 4,499 | 183 |
| 2017 | 6,249 | — | — | 481 | 2.64 | 854 | 129 | 725 | 283 | 18 | 17 | 681 | 2,692 | 4,236 | 180 |
| 2016 | 5,681 | — | — | 397 | 2.22 | 650 | 218 | 432 | 272 | 101 | 15 | 546 | 2,145 | 3,597 | 178 |
| 2015 | 5,392 | — | — | 357 | 2.06 | 686 | 99 | 587 | 258 | — | 11 | 480 | 2,072 | 3,638 | 172 |
| 2014 | 4,627 | — | — | 303 | 1.97 | 437 | 82 | 355 | 223 | — | 11 | 314 | 2,125 | 3,229 | 153 |
| 2013 | 3,180 | — | — | 269 | 2.06 | 350 | 94 | 256 | 183 | — | 8 | 298 | 825 | 2,086 | 129 |
| 2012 | 2,520 | — | — | 195 | 1.59 | 343 | 51 | 292 | 204 | 2 | 8 | 302 | 725 | 1,659 | 121 |
| 2011 | 2,135 | — | — | 144 | 1.28 | 284 | 46 | 238 | 146 | 1 | 14 | 291 | 675 | 1,244 | 112 |
| 2010 | 1,864 | — | — | 174 | 1.66 | 230 | 25 | 204 | 134 | 1 | 9 | 250 | 550 | 1,107 | 105 |
| 2009 | 1,729 | — | — | 129 | 1.28 | 212 | 24 | 188 | 128 | 1 | 10 | 206 | 550 | 893 | 101 |
| 2008 | 1,645 | — | — | 77 | 0.82 | 161 | 32 | 129 | 119 | 1 | 11 | 194 | — | 739 | — |
Some concepts are structurally absent for certain industries (banks report no gross profit or capex). Missing ≠ zero.