Arthur J. Gallagher & Co
AJG: XNYS (USA)
Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
---|---|---|---|
$238.00 | Fsngzx | Thkmpzjlg |
Gallagher Enjoys a Narrow Moat and Stable Operations
Business Strategy and Outlook
Gallagher is somewhat of a tollbooth business. The company enjoys sticky customer relationships and its revenue is driven by insurance transactions, which are stable as most insurance purchases are non-discretionary. Since its fees are often set as a percentage of premium levels, it does have some exposure to the insurance pricing cycle, but revenue for the business is still fairly steady. The company’s cost structure is flexible, and capital needs are minimal. The net result is relatively healthy and stable free cash flow.