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Arthur J. Gallagher (AJG) Adds Coverys Insurance to Portfolio
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Arthur J. Gallagher & Co. (AJG - Free Report) recently acquired Coverys Insurance Services. The buyout will help AJG consolidate its presence in Michigan.
East Lansing, MI-based Coverys Insurance Services specializes in offering healthcare clients protection against medical malpractice and professional liability. It serves clients across Michigan. The addition of Coverys will not only consolidate the acquirer’s presence in that region but also offer growth opportunities.
Arthur J. Gallagher has an impressive inorganic story with buyouts in the Brokerage and Risk Management segments. This insurance broker acquired 37 entities in the first nine months of 2023 that contributed about $475.3 million to estimated annualized revenues. Arthur J. Gallagher is growing through mergers and acquisitions, most of which are within its Brokerage segment.
AJG has a solid merger and acquisition pipeline with about 45 term sheets either agreed upon or being prepared, representing more than $450 million of annualized revenues. Revenue growth rates generally range from 5% to 20% for 2023 acquisitions.
A solid capital position supports this Zacks Rank #2 (Buy) insurance broker in its growth initiatives. It remains focused on continuing its tuck-in mergers and acquisitions. AJG continues to expect M&A capacity upward of $3 billion through the end of 2023 and another $3.5 billion in 2024 without using any equity.
Arthur J. Gallagher’s long-term growth strategies should help it deliver organic revenue improvement and pursue 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 30.2% year to date, outperforming the industry’s 14.8% increase. Solid performance of the Brokerage and Risk Management segments, strategic buyouts to capitalize on growing market opportunities and effective capital deployment should continue to drive share price higher.
Image Source: Zacks Investment Research
Acquisition by Another Industry Player
Given the insurance industry’s adequate capital level, Brown & Brown, Inc. (BRO - Free Report) closed the acquisition of all the assets of Pacific Underwriters, boosting its capabilities in two different specialized niches and expanding the National Programs segment’s abilities and footprint in the Pacific Northwest.
These strategic buyouts help Brown & Brown increase commissions and fees, which, in turn, drive revenues. BRO’s impressive growth is driven by organic and inorganic means across all segments. Solid earnings have allowed the company to expand its capabilities, with the buyouts extending its geographic footprint.
Marsh & McLennan delivered a four-quarter average earnings surprise of 6.45%. MMC has gained 19.9% in a year.
The Zacks Consensus Estimate for Marsh & McLennan’s 2023 and 2024 earnings per share is pegged at $7.93 and $8.67, indicating a year-over-year increase of 15.7% and 9.3%, respectively.
Aon delivered a four-quarter average earnings surprise of 1.41%. Shares of AON have gained 0.1% in a year.
The Zacks Consensus Estimate for Aon’s 2023 and 2024 earnings per share is pegged at $14.35 and $16.25, indicating a year-over-year increase of 7.1% and 13.2%, respectively.
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Arthur J. Gallagher (AJG) Adds Coverys Insurance to Portfolio
Arthur J. Gallagher & Co. (AJG - Free Report) recently acquired Coverys Insurance Services. The buyout will help AJG consolidate its presence in Michigan.
East Lansing, MI-based Coverys Insurance Services specializes in offering healthcare clients protection against medical malpractice and professional liability. It serves clients across Michigan. The addition of Coverys will not only consolidate the acquirer’s presence in that region but also offer growth opportunities.
Arthur J. Gallagher has an impressive inorganic story with buyouts in the Brokerage and Risk Management segments. This insurance broker acquired 37 entities in the first nine months of 2023 that contributed about $475.3 million to estimated annualized revenues. Arthur J. Gallagher is growing through mergers and acquisitions, most of which are within its Brokerage segment.
AJG has a solid merger and acquisition pipeline with about 45 term sheets either agreed upon or being prepared, representing more than $450 million of annualized revenues. Revenue growth rates generally range from 5% to 20% for 2023 acquisitions.
A solid capital position supports this Zacks Rank #2 (Buy) insurance broker in its growth initiatives. It remains focused on continuing its tuck-in mergers and acquisitions. AJG continues to expect M&A capacity upward of $3 billion through the end of 2023 and another $3.5 billion in 2024 without using any equity.
Arthur J. Gallagher’s long-term growth strategies should help it deliver organic revenue improvement and pursue 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 30.2% year to date, outperforming the industry’s 14.8% increase. Solid performance of the Brokerage and Risk Management segments, strategic buyouts to capitalize on growing market opportunities and effective capital deployment should continue to drive share price higher.
Image Source: Zacks Investment Research
Acquisition by Another Industry Player
Given the insurance industry’s adequate capital level, Brown & Brown, Inc. (BRO - Free Report) closed the acquisition of all the assets of Pacific Underwriters, boosting its capabilities in two different specialized niches and expanding the National Programs segment’s abilities and footprint in the Pacific Northwest.
These strategic buyouts help Brown & Brown increase commissions and fees, which, in turn, drive revenues. BRO’s impressive growth is driven by organic and inorganic means across all segments. Solid earnings have allowed the company to expand its capabilities, with the buyouts extending its geographic footprint.
Other Stocks to Consider
Some other top-ranked stocks from the Brokerage Insurance space are Marsh & McLennan Companies, Inc. (MMC - Free Report) and Aon plc (AON - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Marsh & McLennan delivered a four-quarter average earnings surprise of 6.45%. MMC has gained 19.9% in a year.
The Zacks Consensus Estimate for Marsh & McLennan’s 2023 and 2024 earnings per share is pegged at $7.93 and $8.67, indicating a year-over-year increase of 15.7% and 9.3%, respectively.
Aon delivered a four-quarter average earnings surprise of 1.41%. Shares of AON have gained 0.1% in a year.
The Zacks Consensus Estimate for Aon’s 2023 and 2024 earnings per share is pegged at $14.35 and $16.25, indicating a year-over-year increase of 7.1% and 13.2%, respectively.