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Arthur J. Gallagher (AJG) Expands in Ireland With Buyout
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Arthur J. Gallagher & Co. (AJG - Free Report) has acquired First Ireland Risk Management Limited. The acquisition will help AJG expand its footprint in Ireland.
Dublin, Ireland-based First Ireland Risk Management Limited was formed in 1982. This retail insurance broker provides commercial and personal insurance products as well as life and pension solutions to clients throughout Ireland. The insurer has been in operation for four decades. Adding these entities will enhance the acquirer’s compelling portfolio and consolidate its presence in the region. The recent buyout marks the fourth acquisition in this year so far.
AJG’s revenues are geographically diversified with strong domestic and international operations, which contribute about one-third of revenues and are spread across Australia, Bermuda, Canada, the Caribbean, New Zealand and the United Kingdom. The company expects international contribution to total revenues to increase, given the number and size of the non-U.S. acquisitions.
Arthur J. Gallagher boasts an impressive inorganic story. This Zacks Rank #3 (Hold) made 10 buyouts in the fourth quarter of 2022 while closing 19 new tuck-in brokerage mergers, representing about $107 million of estimated annualized revenues in the first nine months of 2022. AJG has a strong merger and acquisition pipeline with about $400 million of revenues, associated with about 50 term sheets either agreed upon or being prepared.
A solid capital position supports AJG in its growth initiatives and it thus remains focused on continuing its tuck-in mergers and acquisitions. The company expects M&A capacity at more than $4 billion through the end of 2023.
This insurance broker remains focused on long-term growth strategies for delivering organic revenue improvement and pursuing strategic mergers and acquisitions. AJG is focused on productivity improvements and quality enhancements that should help it post sturdy numbers in the future.
Shares of Arthur J. Gallagher have gained 26.6% in a year to date, outperforming the industry’s 11.8% increase. The efforts to ramp up its growth profile and capital position should continue to drive the share price higher.
Image Source: Zacks Investment Research
Given the insurance industry’s adequate capital level, another player like Marsh & McLennan Companies, Inc. (MMC - Free Report) has been pursuing strategic mergers and acquisitions. Marsh & McLennan’s business, Marsh recently acquired HMS Insurance Associates, Inc. through its subsidiary Marsh McLennan Agency or MMA in January 2023. MMA is expected to gain vastly from HMS Insurance’s robust experience in property and casualty insurance, group captive, employee benefits and surety operations. The move is likely to boost Marsh McLennan Agency’s footprint in the Hunt Valley region.
Acquisitions are part of the core growth strategies of the company. MMC made numerous purchases within its different operating units, which have enabled it to enter geographical regions, expand within the existing ones, foray into new businesses, develop segments and specialize within its existing businesses. Marsh & McLennan’s shares have gained 6.1% in the past year.
Aon’s earnings surpassed estimates in three of the last four quarters and missed in one, the average being 2.83%. In the past year, AON has gained 11.4%.
The Zacks Consensus Estimate for AON’s 2023 earnings implies a year-over-year rise of 10.2%.
First American has a solid track record of beating earnings estimates in each of the last six quarters. In the past year, FAF has lost 28.6%.
The Zacks Consensus Estimate for FAF’s 2023 earnings has moved 3.9% north in the past 60 days.
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Arthur J. Gallagher (AJG) Expands in Ireland With Buyout
Arthur J. Gallagher & Co. (AJG - Free Report) has acquired First Ireland Risk Management Limited. The acquisition will help AJG expand its footprint in Ireland.
Dublin, Ireland-based First Ireland Risk Management Limited was formed in 1982. This retail insurance broker provides commercial and personal insurance products as well as life and pension solutions to clients throughout Ireland. The insurer has been in operation for four decades. Adding these entities will enhance the acquirer’s compelling portfolio and consolidate its presence in the region. The recent buyout marks the fourth acquisition in this year so far.
AJG’s revenues are geographically diversified with strong domestic and international operations, which contribute about one-third of revenues and are spread across Australia, Bermuda, Canada, the Caribbean, New Zealand and the United Kingdom. The company expects international contribution to total revenues to increase, given the number and size of the non-U.S. acquisitions.
Arthur J. Gallagher boasts an impressive inorganic story. This Zacks Rank #3 (Hold) made 10 buyouts in the fourth quarter of 2022 while closing 19 new tuck-in brokerage mergers, representing about $107 million of estimated annualized revenues in the first nine months of 2022. AJG has a strong merger and acquisition pipeline with about $400 million of revenues, associated with about 50 term sheets either agreed upon or being prepared.
A solid capital position supports AJG in its growth initiatives and it thus remains focused on continuing its tuck-in mergers and acquisitions. The company expects M&A capacity at more than $4 billion through the end of 2023.
This insurance broker remains focused on long-term growth strategies for delivering organic revenue improvement and pursuing strategic mergers and acquisitions. AJG is focused on productivity improvements and quality enhancements that should help it post sturdy numbers in the future.
Shares of Arthur J. Gallagher have gained 26.6% in a year to date, outperforming the industry’s 11.8% increase. The efforts to ramp up its growth profile and capital position should continue to drive the share price higher.
Image Source: Zacks Investment Research
Given the insurance industry’s adequate capital level, another player like Marsh & McLennan Companies, Inc. (MMC - Free Report) has been pursuing strategic mergers and acquisitions. Marsh & McLennan’s business, Marsh recently acquired HMS Insurance Associates, Inc. through its subsidiary Marsh McLennan Agency or MMA in January 2023. MMA is expected to gain vastly from HMS Insurance’s robust experience in property and casualty insurance, group captive, employee benefits and surety operations. The move is likely to boost Marsh McLennan Agency’s footprint in the Hunt Valley region.
Acquisitions are part of the core growth strategies of the company. MMC made numerous purchases within its different operating units, which have enabled it to enter geographical regions, expand within the existing ones, foray into new businesses, develop segments and specialize within its existing businesses. Marsh & McLennan’s shares have gained 6.1% in the past year.
Stocks to Consider
Some better-ranked stocks from the insurance industry are Aon plc (AON - Free Report) and First American Financial Corporation (FAF - Free Report) , both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Aon’s earnings surpassed estimates in three of the last four quarters and missed in one, the average being 2.83%. In the past year, AON has gained 11.4%.
The Zacks Consensus Estimate for AON’s 2023 earnings implies a year-over-year rise of 10.2%.
First American has a solid track record of beating earnings estimates in each of the last six quarters. In the past year, FAF has lost 28.6%.
The Zacks Consensus Estimate for FAF’s 2023 earnings has moved 3.9% north in the past 60 days.