# Arthur J. Gallagher (AJG) Sector: Insurance brokerage | Field | Value | |---|---| | Price | $280.60 | | Market cap | $72B | | Intrinsic value source | Analysts | | Data as of | 2026-11-10 | | Next earnings | 2027-01-29 (estimate) | Analysts: Bullish Picks: Research only Discount category: Far above intrinsic value ## In short Investors pay a premium for the steady organic growth and acquisitions of Gallagher, and only many years of growth with higher margins can earn it. ## Themes and gap - Themes: Interest rates (interest-rates), Regulation and courts (regulation-legal) - Gap type: Slow (slow) - Why: Only many years of organic growth near 5% or more, acquisitions and higher margins can earn the premium. ## About Arthur J. Gallagher (Gallagher) is an insurance broker and risk management company. It does not take insurance risk on a net basis. The Brokerage segment helps companies and people buy property, casualty, specialty and employee benefits insurance and reinsurance, and it earns commissions and fees. The Risk Management segment, mainly Gallagher Bassett, manages insurance claims for companies that insure themselves. In the first nine months of 2026, Brokerage gave $11,268 million and Risk Management $1,338 million of revenues before reimbursements. Gallagher works in about 130 countries through its own offices and other brokers, and it had 74,614 employees at September 30, 2026. It grows through many small acquisitions, and it bought AssuredPartners for $13.8 billion in August 2025. The head office is in Rolling Meadows, Illinois. J. Patrick Gallagher, Jr. is Chairman and Chief Executive Officer. ## Thesis Gallagher trades above its intrinsic value because investors pay for its steady organic growth, its long record of acquisitions and its rising margins. In Q3 2026, revenue of the Brokerage and Risk Management segments rose 18%, with 5% organic growth, and adjusted EBITDAC rose 25%, the 26th quarter in a row of double-digit growth. Adjusted EPS rose to $3.00 from $2.31. For the shares to earn this price, three things must be true. Organic growth must stay near 5% or more when insurance prices rise more slowly. The AssuredPartners business must reach the planned margins, so that integration costs ($303 million before tax in Brokerage in the first nine months of 2026) fall. Gallagher must keep buying small brokers at sensible prices. The Q4 2026 report, expected in late January 2027, is the next test. A fall in insurance prices, slower organic growth or a large acquisition at a high price can make the premium hard to keep. ## Checkpoints - Oct 29, 2026: Q3 2026 results: organic growth. Status: Passed. Watch: Organic growth of 5% or more and higher adjusted EBITDAC margins pass; organic growth below 4% fails. Outcome: Organic growth was 5%, and adjusted EBITDAC rose 25% with a higher margin. - Jan 29, 2027 (estimate): Q4 2026 results and 2027 outlook. Status: Pending. Watch: Organic growth of 5% or more and higher adjusted EPS pass; organic growth below 4% fails. - 2027 (estimate): AssuredPartners integration. Status: Pending. Watch: Lower integration costs and higher Brokerage margins in 2027 pass; new large integration charges fail. ## Balance sheet - Cash: $1.2B - Debt: $13.1B - Net debt: $11.9B - EBITDA, last 12 months: $4.3B - Net debt / EBITDA: 2.8× (medium) - Interest cover: 5.0× - Undrawn credit line: $1.9B, to April 2030 - Debt due within 12 months: $1.2B - Last debt due: 2055 Gallagher funds itself with senior notes, private notes, a revolving credit facility, retained cash flow and some new shares for acquisitions. At September 30, 2026, corporate and other debt was $13,091 million: $9,550 million of senior notes, $2,683 million of notes under note purchase agreements, $630 million drawn on the credit facility and $228 million of premium financing debt. Current borrowings were $1,236 million, including the premium financing debt. Cash and cash equivalents were $1,213 million, not including fiduciary cash of $7,596 million that Gallagher holds for clients and insurers. The $2,500 million credit facility runs to April 3, 2030, and $1,868 million was available after borrowings and letters of credit. EBITDAC for the 12 months to September 30, 2026 was $4,261 million ($3,551 million for the first nine months of 2026 and $710 million for Q4 2025). Interest cover is earnings before interest and income taxes divided by interest for the first nine months of 2026 ($2,466 million against $494 million). The last senior notes, $1,500 million at 5.55%, are due in February 2055. The quarterly dividend is $0.70 per share, and there were 256,415 thousand shares at September 30, 2026. As of 2026-09-30. Sources: - https://www.sec.gov/Archives/edgar/data/354190/000162828026070650/ajg-20260930.htm - https://www.sec.gov/Archives/edgar/data/354190/000162828026068263/a3rdquarter2026earningsrel.htm - https://www.sec.gov/Archives/edgar/data/354190/000119312526029407/d38405dex991.htm - https://www.sec.gov/Archives/edgar/data/354190/000162828026008662/ajg-20251231.htm ## Dividends - Dividend yield: 1.0% (last 12 months, at the current price) - Paid per share, last 12 months: $2.75 (4 payments) - Current annual rate: $2.80 ($0.70 x 4 a year) - Payout ratio: 45% of the earnings of the last fiscal year (the year ended 2025-12-31) - Latest ex-dividend date: 2026-09-08, $0.70 per share - Growth over the last 5 years: 7.8% a year - Growth over the last 10 years: 6.2% a year Dividends per share by year: 2016: $1.52, 2017: $1.56, 2018: $1.64, 2019: $1.72, 2020: $1.80, 2021: $1.92, 2022: $2.04, 2023: $2.20, 2024: $2.40, 2025: $2.60. Source: company filings and market data, read on 2026-11-10. ## Recent events - 2026-10-29: Gallagher reported Q3 2026 results. Revenue of the Brokerage and Risk Management segments rose 18%, with organic growth of 5%. Net earnings rose to $406 million, or $1.55 per diluted share, from $273 million. Adjusted EPS was $3.00, against $2.31 a year earlier, and adjusted EBITDAC of the two segments rose 25%. Gallagher bought back about 0.4 million shares for about $100 million in the quarter, and 2.7 million shares for about $580 million in the first nine months of 2026. - 2026-07-30: Gallagher reported Q2 2026 results. Revenue of the Brokerage and Risk Management segments rose 24%, with organic growth of 6%. Adjusted EPS was $2.84, against $2.30 a year earlier. - 2026-07-29: Gallagher said that David Johnson, its Lead Independent Director, died. The board reduced its size to eight members, and the independent directors elected Ralph Nicoletti as Lead Independent Director. - 2026-04-30: Gallagher reported Q1 2026 results. Revenue of the Brokerage and Risk Management segments rose 28%, with organic growth of 5%, mostly from the AssuredPartners acquisition. Adjusted EPS was $4.47, against $3.72 a year earlier. - 2026-01-29: Gallagher reported 2025 results. Revenues before reimbursements rose to $13,778 million from $11,401 million. Diluted net earnings per share fell to $5.74 from $6.50, and adjusted EPS rose to $10.69 from $10.10. The 2024 and early 2025 results included interest income on the money raised for AssuredPartners. ## Latest news and filings - Last earnings: 2026-10-29 (8-K: https://www.sec.gov/Archives/edgar/data/354190/000162828026068263/) - Next earnings: 2027-01-29 (expected; the company has not confirmed it) | Filed | Form | Headline | Period end | XBRL document | Link | | --- | --- | --- | --- | --- | --- | | 2026-11-05 | 10-Q | Quarterly report for the period ended Sep 30, 2026 | 2026-09-30 | ajg-20260930 | https://www.sec.gov/Archives/edgar/data/354190/000162828026070650/ajg-20260930.htm | | 2026-10-29 | 8-K | Earnings release and Investor disclosure | | ajg-20261029 | https://www.sec.gov/Archives/edgar/data/354190/000162828026068263/ajg-20261029.htm | | 2026-08-27 | 8-K | Change of directors or officers | | ajg-20260824 | https://www.sec.gov/Archives/edgar/data/354190/000035419026000197/ajg-20260824.htm | | 2026-08-05 | 10-Q | Quarterly report for the period ended Jun 30, 2026 | 2026-06-30 | ajg-20260630 | https://www.sec.gov/Archives/edgar/data/354190/000162828026053489/ajg-20260630.htm | | 2026-07-30 | 8-K | Earnings release and Investor disclosure | | ajg-20260730 | https://www.sec.gov/Archives/edgar/data/354190/000162828026051070/ajg-20260730.htm | | 2026-07-29 | 8-K | Other company news | | ajg-20260722 | https://www.sec.gov/Archives/edgar/data/354190/000035419026000184/ajg-20260722.htm | | 2026-06-17 | 8-K | Investor disclosure | | ajg-20260617 | https://www.sec.gov/Archives/edgar/data/354190/000035419026000171/ajg-20260617.htm | | 2026-05-13 | 8-K | Shareholder vote results | | ajg-20260512 | https://www.sec.gov/Archives/edgar/data/354190/000035419026000142/ajg-20260512.htm | | 2026-05-07 | 10-Q | Quarterly report for the period ended Mar 31, 2026 | 2026-03-31 | ajg-20260331 | https://www.sec.gov/Archives/edgar/data/354190/000162828026031592/ajg-20260331.htm | | 2026-04-30 | 8-K | Earnings release and Investor disclosure | | ajg-20260430 | https://www.sec.gov/Archives/edgar/data/354190/000035419026000132/ajg-20260430.htm | Every filing on SEC EDGAR (CIK 354190): https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000354190&type=&dateb=&owner=include&count=40 ## Risks - Medium: Commissions move with insurance premiums. If insurance prices fall or rise more slowly, organic growth slows. - Medium: Growth depends on acquisitions. Gallagher completed 21 acquisitions in the first nine months of 2026. Integration costs, earnout payments and a higher price for each acquisition can lower returns, and a large acquisition such as AssuredPartners adds integration risk. - Medium: Corporate and other debt was $13,091 million at September 30, 2026. Interest was $494 million in the first nine months of 2026, and goodwill and intangible assets were $33,587 million. - Low: Gallagher has legacy clean energy investments. Claims about them, or a disallowance of tax credits that it already claimed, can cause costs. - Low: A broker holds client money and data. Errors in advice, a cyber attack or a breach of rules on sanctions or bribery can cause claims and fines. ## Links - Page: https://picks.utilarium.app/company/AJG/ - History of changes: https://picks.utilarium.app/company/AJG/history/ - JSON with full history: https://picks.utilarium.app/data/company/AJG.json > Picks is a personal record of stock picks. It gives general opinions about stocks, including a "Top pick" label. They are not tailored to your needs, goals or risk tolerance. Kevin is not a registered adviser and relies on the general-advice exemption in Canadian securities law (NI 31-103 s.8.25). Do your own research, or ask a registered adviser. Kevin may hold any stock on this site. Prices, intrinsic values and ratings can be delayed or wrong; check the original source. Full disclaimer: /disclaimer/.