U.S. Markets closed

Arthur J. Gallagher Expands in Australia With P2 Group Buyout

Zacks Equity Research

Arthur J. Gallagher & Co. AJG recently acquired P2 Group in its effort to grow outside the United States.  The terms of the transaction have not been revealed.

Hawthorn, Victoria-based P2 Group was founded in 2003. The company helps employers manage occupational health and lower the risk of worker injuries and WorkCover claims. Addition of P2 Group to Arthur J. Gallagher’s portfolio will help boost its retail brokerage division's Workplace Risk Practice's footprint as well as consolidate its presence in Victoria. The acquisition will also enhance cross-selling opportunities for the acquirer.

Arthur J. Gallagher is one of the top five global brokers. The company’s revenues are geographically diversified with strong domestic and international operations. Over some time, the company has been actively pursuing acquisitions outside the United States to grow its international operations.  

In the first quarter of 2019, international operations across Australia, Bermuda, Canada, the Caribbean, New Zealand and the United Kingdom generated 26% of the revenues. Given the number and size of its non-U.S. acquisitions, the Zacks Rank #3 (Hold) insurance broker expects international contribution to total revenues to increase. Its recent acquisitions have helped it expand in New Zealand, Australia and United Kingdom.

Arthur J. Gallagher remains focused on its long-term growth strategies of delivering organic revenue growth and pursuing strategic mergers and acquisition. It is also focused on productivity improvements and quality enhancements that should help it post sturdy numbers in the future.

Shares of Arthur J. Gallagher have gained 10.5% quarter to date, in line with the industry’s rise The company’s policy to ramp up its growth profile and capital position should continue to drive share price higher.



There have been a host of acquisitions in the insurance space of late given the significant capital available. Brown & Brown of Kentucky, Inc., a subsidiary of Brown & Brown, Inc. BRO, acquired United Development Systems, Inc. The Hartford Financial Services Group, Inc. HIG acquired The Navigators Group, Inc.

A Stock to Consider

A better-ranked insurer is eHealth, Inc. EHTH, sporting a Zacks Rank #1 (Strong Buy).  You can see the complete list of today’s Zacks #1 Rank stocks here.

eHealth provides private health insurance exchange services to individuals, families, and small businesses in the United States and China. The company delivered positive earnings surprise of 512.20% in the last reported quarter.   

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
eHealth, Inc. (EHTH) : Free Stock Analysis Report
 
Arthur J. Gallagher & Co. (AJG) : Free Stock Analysis Report
 
Brown & Brown, Inc. (BRO) : Free Stock Analysis Report
 
The Hartford Financial Services Group, Inc. (HIG) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research