Arthur J. Gallagher (AJG) Consolidates Portfolio With Buyout

·3 min read

Arthur J. Gallagher & Co. AJG has acquired Anderson Benson. The acquisition will help the acquirer expand its footprint in Texas. This marks the first acquisition by AJG in 2023.

Nashville, TN-based Anderson Benson was formed in 2012. This retail insurance broker hospitality, construction, and transportation industry clients as well as private clients across the nation. This company boasts entertainment niche expertise. The addition of this company to the acquirer’s portfolio will add capabilities to its already compelling existing portfolio.

Arthur J. Gallagher has an impressive inorganic story with buyouts made in both Brokerage and Risk Management segments. This Zacks Rank #3 (Hold) insurance broker acquired 36 entities in 2022 that contributed about $107 million to estimated annualized revenues of $244 million. AJG has a strong merger and acquisition pipeline with about $300 million of revenues, associated with about 45 term sheets either agreed upon or being prepared.

A geographically diversified background, strong domestic and international operations and a compelling product and service portfolio through strategic buyouts should continue to drive AJG’s top line. 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 an M&A capacity of more than $3 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 18.5% in a year, outperforming the industry’s 3.3% increase. The efforts to ramp up its growth profile and capital position should continue to drive the share price higher.

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Stocks to Consider

Some better-ranked stocks from the insurance industry are AMERISAFE AMSF, Employers Holdings EIG and Aflac AFL.

AMERISAFE delivered a trailing four-quarter average earnings surprise of 26.19%. In the past year, AMSF has lost 91.4%.

The Zacks Consensus Estimate for AMSF’s 2023 and 2024 earnings has moved 12.2% and 4.2% north, respectively, in the past seven days.  AMSF sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Employers Holdings delivered a trailing four-quarter average earnings surprise of 26.87%. In the past year, EIG has gained 22%.

The Zacks Consensus Estimate for EIG’s 2023 and 2024 earnings has moved 3.3% and 4.6% north, respectively, in the past seven days.  Employers Holdings sports a Zacks Rank #1.

Aflac has a solid track record of beating earnings estimates in each of the last six quarters. In the past year, AFL has lost 28.6%.

The Zacks Consensus Estimate for AFL’s 2023 and 2024 earnings has moved 2.9% and 1.9% north, respectively, in the past 30 days. Aflac carries a Zacks Rank #2.

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Employers Holdings Inc (EIG) : Free Stock Analysis Report

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