Intrinsic value of Arthur J. Gallagher - AJG

Previous Close

$70.39

  Intrinsic Value

$104.55

stock screener

  Rating & Target

buy

+49%

Previous close

$70.39

 
Intrinsic value

$104.55

 
Up/down potential

+49%

 
Rating

buy

Our model is not good at valuating stocks of financial companies, such as AJG.

We calculate the intrinsic value of AJG stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 12.7

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  10.10
  9.59
  9.13
  8.72
  8.35
  8.01
  7.71
  7.44
  7.20
  6.98
  6.78
  6.60
  6.44
  6.30
  6.17
  6.05
  5.95
  5.85
  5.77
  5.69
  5.62
  5.56
  5.50
  5.45
  5.41
  5.37
  5.33
  5.30
  5.27
  5.24
Revenue, $m
  6,782
  7,433
  8,111
  8,818
  9,554
  10,320
  11,115
  11,942
  12,802
  13,695
  14,623
  15,588
  16,592
  17,637
  18,724
  19,857
  21,038
  22,269
  23,553
  24,892
  26,291
  27,753
  29,280
  30,876
  32,545
  34,292
  36,119
  38,033
  40,036
  42,134
Variable operating expenses, $m
  6,120
  6,650
  7,204
  7,781
  8,382
  9,007
  9,656
  10,331
  11,032
  11,761
  11,935
  12,722
  13,542
  14,394
  15,282
  16,206
  17,170
  18,174
  19,222
  20,316
  21,458
  22,650
  23,896
  25,199
  26,562
  27,987
  29,479
  31,040
  32,675
  34,387
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  6,120
  6,650
  7,204
  7,781
  8,382
  9,007
  9,656
  10,331
  11,032
  11,761
  11,935
  12,722
  13,542
  14,394
  15,282
  16,206
  17,170
  18,174
  19,222
  20,316
  21,458
  22,650
  23,896
  25,199
  26,562
  27,987
  29,479
  31,040
  32,675
  34,387
Operating income, $m
  663
  782
  907
  1,037
  1,172
  1,313
  1,459
  1,611
  1,769
  1,934
  2,688
  2,866
  3,051
  3,243
  3,443
  3,651
  3,868
  4,094
  4,330
  4,577
  4,834
  5,102
  5,383
  5,677
  5,984
  6,305
  6,641
  6,992
  7,361
  7,746
EBITDA, $m
  1,909
  2,092
  2,283
  2,482
  2,689
  2,905
  3,129
  3,361
  3,603
  3,854
  4,116
  4,387
  4,670
  4,964
  5,270
  5,589
  5,921
  6,268
  6,629
  7,006
  7,400
  7,811
  8,241
  8,690
  9,160
  9,652
  10,166
  10,704
  11,268
  11,859
Interest expense (income), $m
  113
  169
  217
  267
  319
  374
  431
  489
  551
  615
  681
  750
  821
  895
  973
  1,053
  1,137
  1,224
  1,315
  1,410
  1,509
  1,612
  1,720
  1,833
  1,950
  2,073
  2,202
  2,336
  2,477
  2,625
  2,779
Earnings before tax, $m
  493
  565
  640
  718
  798
  883
  970
  1,061
  1,155
  1,253
  1,939
  2,045
  2,155
  2,270
  2,389
  2,514
  2,644
  2,779
  2,920
  3,068
  3,222
  3,382
  3,551
  3,726
  3,910
  4,103
  4,304
  4,515
  4,736
  4,967
Tax expense, $m
  133
  153
  173
  194
  216
  238
  262
  286
  312
  338
  524
  552
  582
  613
  645
  679
  714
  750
  788
  828
  870
  913
  959
  1,006
  1,056
  1,108
  1,162
  1,219
  1,279
  1,341
Net income, $m
  360
  413
  467
  524
  583
  644
  708
  774
  843
  915
  1,415
  1,493
  1,573
  1,657
  1,744
  1,835
  1,930
  2,029
  2,132
  2,239
  2,352
  2,469
  2,592
  2,720
  2,855
  2,995
  3,142
  3,296
  3,457
  3,626

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  14,189
  15,549
  16,969
  18,448
  19,988
  21,590
  23,254
  24,984
  26,782
  28,650
  30,592
  32,611
  34,712
  36,897
  39,172
  41,542
  44,012
  46,587
  49,273
  52,076
  55,003
  58,060
  61,255
  64,594
  68,087
  71,740
  75,564
  79,566
  83,757
  88,146
Adjusted assets (=assets-cash), $m
  14,189
  15,549
  16,969
  18,448
  19,988
  21,590
  23,254
  24,984
  26,782
  28,650
  30,592
  32,611
  34,712
  36,897
  39,172
  41,542
  44,012
  46,587
  49,273
  52,076
  55,003
  58,060
  61,255
  64,594
  68,087
  71,740
  75,564
  79,566
  83,757
  88,146
Revenue / Adjusted assets
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
Average production assets, $m
  6,619
  7,254
  7,917
  8,607
  9,325
  10,072
  10,849
  11,656
  12,494
  13,366
  14,272
  15,214
  16,194
  17,214
  18,275
  19,381
  20,533
  21,734
  22,987
  24,295
  25,660
  27,087
  28,577
  30,135
  31,764
  33,469
  35,253
  37,120
  39,075
  41,122
Working capital, $m
  -3,825
  -4,192
  -4,575
  -4,974
  -5,389
  -5,820
  -6,269
  -6,736
  -7,220
  -7,724
  -8,247
  -8,792
  -9,358
  -9,947
  -10,561
  -11,200
  -11,865
  -12,560
  -13,284
  -14,039
  -14,828
  -15,652
  -16,514
  -17,414
  -18,356
  -19,341
  -20,371
  -21,450
  -22,580
  -23,763
Total debt, $m
  4,017
  4,945
  5,914
  6,922
  7,973
  9,065
  10,200
  11,380
  12,606
  13,880
  15,204
  16,581
  18,014
  19,504
  21,056
  22,673
  24,357
  26,113
  27,945
  29,857
  31,853
  33,937
  36,116
  38,394
  40,776
  43,267
  45,875
  48,605
  51,463
  54,456
Total liabilities, $m
  9,677
  10,605
  11,573
  12,582
  13,632
  14,724
  15,859
  17,039
  18,265
  19,539
  20,864
  22,241
  23,673
  25,164
  26,716
  28,332
  30,016
  31,772
  33,604
  35,516
  37,512
  39,597
  41,776
  44,053
  46,435
  48,927
  51,534
  54,264
  57,122
  60,115
Total equity, $m
  4,512
  4,945
  5,396
  5,867
  6,356
  6,865
  7,395
  7,945
  8,517
  9,111
  9,728
  10,370
  11,038
  11,733
  12,457
  13,210
  13,996
  14,815
  15,669
  16,560
  17,491
  18,463
  19,479
  20,541
  21,652
  22,813
  24,029
  25,302
  26,635
  28,030
Total liabilities and equity, $m
  14,189
  15,550
  16,969
  18,449
  19,988
  21,589
  23,254
  24,984
  26,782
  28,650
  30,592
  32,611
  34,711
  36,897
  39,173
  41,542
  44,012
  46,587
  49,273
  52,076
  55,003
  58,060
  61,255
  64,594
  68,087
  71,740
  75,563
  79,566
  83,757
  88,145
Debt-to-equity ratio
  0.890
  1.000
  1.100
  1.180
  1.250
  1.320
  1.380
  1.430
  1.480
  1.520
  1.560
  1.600
  1.630
  1.660
  1.690
  1.720
  1.740
  1.760
  1.780
  1.800
  1.820
  1.840
  1.850
  1.870
  1.880
  1.900
  1.910
  1.920
  1.930
  1.940
Adjusted equity ratio
  0.318
  0.318
  0.318
  0.318
  0.318
  0.318
  0.318
  0.318
  0.318
  0.318
  0.318
  0.318
  0.318
  0.318
  0.318
  0.318
  0.318
  0.318
  0.318
  0.318
  0.318
  0.318
  0.318
  0.318
  0.318
  0.318
  0.318
  0.318
  0.318
  0.318

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  360
  413
  467
  524
  583
  644
  708
  774
  843
  915
  1,415
  1,493
  1,573
  1,657
  1,744
  1,835
  1,930
  2,029
  2,132
  2,239
  2,352
  2,469
  2,592
  2,720
  2,855
  2,995
  3,142
  3,296
  3,457
  3,626
Depreciation, amort., depletion, $m
  1,246
  1,310
  1,376
  1,445
  1,517
  1,592
  1,669
  1,750
  1,834
  1,921
  1,427
  1,521
  1,619
  1,721
  1,828
  1,938
  2,053
  2,173
  2,299
  2,429
  2,566
  2,709
  2,858
  3,013
  3,176
  3,347
  3,525
  3,712
  3,907
  4,112
Funds from operations, $m
  1,606
  1,722
  1,843
  1,969
  2,100
  2,236
  2,377
  2,524
  2,677
  2,835
  2,843
  3,014
  3,193
  3,378
  3,572
  3,773
  3,983
  4,202
  4,430
  4,669
  4,918
  5,178
  5,450
  5,734
  6,031
  6,342
  6,667
  7,008
  7,365
  7,738
Change in working capital, $m
  -351
  -367
  -383
  -399
  -415
  -432
  -449
  -466
  -485
  -504
  -524
  -544
  -566
  -589
  -613
  -639
  -666
  -694
  -724
  -756
  -789
  -824
  -861
  -900
  -942
  -985
  -1,031
  -1,079
  -1,130
  -1,183
Cash from operations, $m
  1,957
  2,089
  2,226
  2,368
  2,515
  2,667
  2,826
  2,990
  3,161
  3,339
  3,366
  3,559
  3,759
  3,968
  4,185
  4,412
  4,649
  4,896
  5,155
  5,425
  5,707
  6,002
  6,311
  6,634
  6,973
  7,327
  7,698
  8,087
  8,495
  8,922
Maintenance CAPEX, $m
  -601
  -662
  -725
  -792
  -861
  -933
  -1,007
  -1,085
  -1,166
  -1,249
  -1,337
  -1,427
  -1,521
  -1,619
  -1,721
  -1,828
  -1,938
  -2,053
  -2,173
  -2,299
  -2,429
  -2,566
  -2,709
  -2,858
  -3,013
  -3,176
  -3,347
  -3,525
  -3,712
  -3,907
New CAPEX, $m
  -606
  -635
  -662
  -690
  -718
  -747
  -777
  -807
  -839
  -872
  -906
  -942
  -980
  -1,020
  -1,062
  -1,106
  -1,152
  -1,201
  -1,253
  -1,308
  -1,365
  -1,426
  -1,490
  -1,558
  -1,629
  -1,705
  -1,784
  -1,867
  -1,955
  -2,048
Cash from investing activities, $m
  -1,207
  -1,297
  -1,387
  -1,482
  -1,579
  -1,680
  -1,784
  -1,892
  -2,005
  -2,121
  -2,243
  -2,369
  -2,501
  -2,639
  -2,783
  -2,934
  -3,090
  -3,254
  -3,426
  -3,607
  -3,794
  -3,992
  -4,199
  -4,416
  -4,642
  -4,881
  -5,131
  -5,392
  -5,667
  -5,955
Free cash flow, $m
  750
  792
  838
  886
  936
  988
  1,042
  1,099
  1,157
  1,218
  1,124
  1,189
  1,258
  1,329
  1,402
  1,479
  1,559
  1,642
  1,728
  1,818
  1,912
  2,010
  2,112
  2,218
  2,330
  2,446
  2,568
  2,695
  2,828
  2,967
Issuance/(repayment) of debt, $m
  884
  928
  968
  1,009
  1,050
  1,092
  1,135
  1,180
  1,226
  1,274
  1,324
  1,377
  1,432
  1,491
  1,552
  1,616
  1,684
  1,756
  1,832
  1,912
  1,996
  2,085
  2,179
  2,278
  2,382
  2,492
  2,608
  2,730
  2,858
  2,993
Issuance/(repurchase) of shares, $m
  47
  20
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  931
  948
  968
  1,009
  1,050
  1,092
  1,135
  1,180
  1,226
  1,274
  1,324
  1,377
  1,432
  1,491
  1,552
  1,616
  1,684
  1,756
  1,832
  1,912
  1,996
  2,085
  2,179
  2,278
  2,382
  2,492
  2,608
  2,730
  2,858
  2,993
Total cash flow (excl. dividends), $m
  1,681
  1,740
  1,806
  1,895
  1,986
  2,080
  2,177
  2,278
  2,383
  2,492
  2,448
  2,566
  2,690
  2,819
  2,954
  3,095
  3,243
  3,398
  3,560
  3,730
  3,908
  4,095
  4,291
  4,496
  4,712
  4,938
  5,175
  5,424
  5,686
  5,960
Retained Cash Flow (-), $m
  -407
  -433
  -451
  -470
  -490
  -509
  -529
  -550
  -572
  -594
  -618
  -642
  -668
  -695
  -724
  -754
  -785
  -819
  -854
  -891
  -931
  -972
  -1,016
  -1,062
  -1,111
  -1,162
  -1,216
  -1,273
  -1,333
  -1,396
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  49
  54
  59
  65
  71
  76
  83
  89
  96
  102
  110
  117
  125
  133
  141
  150
  159
  168
  178
  188
  199
  210
  222
  234
  247
  260
  274
  289
  304
  320
Cash available for distribution, $m
  1,274
  1,308
  1,355
  1,424
  1,496
  1,571
  1,648
  1,728
  1,812
  1,898
  1,830
  1,924
  2,022
  2,124
  2,230
  2,342
  2,458
  2,579
  2,706
  2,838
  2,977
  3,122
  3,275
  3,434
  3,601
  3,776
  3,959
  4,151
  4,353
  4,564
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  1,222
  1,197
  1,179
  1,173
  1,160
  1,140
  1,113
  1,080
  1,041
  995
  869
  821
  769
  713
  655
  595
  535
  475
  417
  361
  308
  259
  215
  175
  140
  110
  85
  64
  48
  34
Current shareholders' claim on cash, %
  99.6
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5

Arthur J. Gallagher & Co. and its subsidiaries are engaged in providing insurance brokerage and consulting services, and third-party claims settlement and administration services to both domestic and international entities. The Company operates through three segments: brokerage, risk management and corporate. The brokerage segment primarily consists of retail and wholesale insurance brokerage operations. Its retail brokerage operations negotiate and place property/casualty, employer-provided health and welfare insurance, and healthcare exchange and retirement solutions principally for middle-market commercial, industrial, public entity, religious and not-for-profit entities. The risk management segment provides contract claim settlement and administration services for enterprises that choose to self-insure some or all of their property/casualty coverages and for insurance companies that choose to outsource some or all of their property/casualty claims departments.

FINANCIAL RATIOS  of  Arthur J. Gallagher (AJG)

Valuation Ratios
P/E Ratio 30.3
Price to Sales 2.2
Price to Book 3.5
Price to Tangible Book
Price to Cash Flow 20.2
Price to Free Cash Flow 31.1
Growth Rates
Sales Growth Rate 3.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 120.2%
Cap. Spend. - 3 Yr. Gr. Rate 18.3%
Financial Strength
Quick Ratio 1
Current Ratio 0.3
LT Debt to Equity 59.6%
Total Debt to Equity 79.2%
Interest Coverage 4
Management Effectiveness
Return On Assets 5%
Ret/ On Assets - 3 Yr. Avg. 4.8%
Return On Total Capital 6.6%
Ret/ On T. Cap. - 3 Yr. Avg. 6.4%
Return On Equity 11.4%
Return On Equity - 3 Yr. Avg. 11.1%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 29.4%
Gross Margin - 3 Yr. Avg. 29.9%
EBITDA Margin 14.7%
EBITDA Margin - 3 Yr. Avg. 13.8%
Operating Margin 8.3%
Oper. Margin - 3 Yr. Avg. 7.8%
Pre-Tax Margin 6.4%
Pre-Tax Margin - 3 Yr. Avg. 5.9%
Net Profit Margin 7.4%
Net Profit Margin - 3 Yr. Avg. 6.9%
Effective Tax Rate -24.6%
Eff/ Tax Rate - 3 Yr. Avg. -23.5%
Payout Ratio 65.7%

AJG stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the AJG stock intrinsic value calculation we used $6160 million for the last fiscal year's total revenue generated by Arthur J. Gallagher. The default revenue input number comes from 2017 income statement of Arthur J. Gallagher. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our AJG stock valuation model: a) initial revenue growth rate of 10.1% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for AJG is calculated based on our internal credit rating of Arthur J. Gallagher, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Arthur J. Gallagher.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of AJG stock the variable cost ratio is equal to 91.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for AJG stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Arthur J. Gallagher.

Corporate tax rate of 27% is the nominal tax rate for Arthur J. Gallagher. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the AJG stock is equal to 0.8%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for AJG are equal to 97.6%.

Life of production assets of 10 years is the average useful life of capital assets used in Arthur J. Gallagher operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for AJG is equal to -56.4%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $4105 million for Arthur J. Gallagher - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 181 million for Arthur J. Gallagher is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Arthur J. Gallagher at the current share price and the inputted number of shares is $12.7 billion.

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COMPANY NEWS

▶ Arthur J. Gallagher & Co. Acquires Belton Boisselle Ltd.   [Jul-19-18 09:00AM  PR Newswire]
▶ [$$] Deal Close Announcements: June 4-8   [Jun-08-18 05:10PM  The Wall Street Journal]
▶ [$$] Palladium to More Than Triple Its Money on Pronto Insurance Sale   [May-10-18 07:08PM  The Wall Street Journal]
▶ Arthur J. Gallagher: 1Q Earnings Snapshot   [May-01-18 04:37PM  Associated Press]
▶ Chicago Cubs and Gallagher Announce "Gallagher Way"   [Apr-08-18 02:45PM  PR Newswire]
▶ Arthur J. Gallagher & Co. Acquires McGregor & Associates   [Mar-29-18 09:00AM  PR Newswire]
▶ Arthur J. Gallagher beats Street 4Q forecasts   [Jan-25-18 04:55PM  Associated Press]
▶ [$$] JPMorgan: Five Stocks It's Selling and One Buy   [Dec-19-17 03:07PM  Barrons.com]
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