Yahoo Finance Arthur J. Gallagher (AJG) Acquires ROC Group, Boosts Portfolio
Arthur J. Gallagher & Co. AJG has acquired ROC Group. The terms of the transaction have not been revealed yet.
Chicago-based ROC Group, founded in 1998, is an employee communication agency dedicated to human resources and workforce change. It caters to clients throughout the United States.
The addition of this entity will enhance the acquirer’s existing benefits and HR offerings through ROC's products and services.
Inorganic Growth Story
Arthur J. Gallagher boasts an impressive inorganic story. In the first nine months of 2022, this Zacks Rank #3 (Hold) insurance broker completed 19 tuck-in brokerage mergers, representing about $102.7 million of estimated annualized revenues. AJG also signed another merger late in the third quarter, which represents an additional $40 million of estimated annualized revenues. The recent acquisition marks the 13th acquisition in the fourth quarter of 2022. AJG’s merger and acquisition pipeline is quite strong with about $400 million of annualized revenues and associated with about 50 term sheets either agreed upon or being prepared.
Arthur J. Gallagher’s revenues are geographically diversified with strong domestic and international operations and a compelling product and service portfolio. A solid capital position supports AJG in its growth initiatives and it, thus, remains focused on continuing its tuck-in mergers and acquisitions. The insurer expects M&A capacity at more than $4 billion through the end of 2023.
AJG 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, which should help it post sturdy numbers in the future.
Price Performance
Shares of Arthur J. Gallagher have gained 11.4% in the past year against the industry’s decline of 7.7%. The insurer’s efforts to ramp up its growth profile and capital position should continue to drive the share price.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the property and casualty insurance industry are Kinsale Capital Group, Inc. KNSL, HCI Group, Inc. HCI and Root, Inc. ROOT, each carrying Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Kinsale Capital’s earnings surpassed estimates in all the last four quarters, the average being 15.16%. In the past year, KNSL has gained 15.2%.
The Zacks Consensus Estimate for KNSL’s 2022 and 2023 earnings implies a respective year-over-year rise of 27.5% and 22.4%.
The Zacks Consensus Estimate for HCI Group’s 2023 earnings has moved 42.8% north in the past 60 days. In the past year, HCI has lost 54.6%.
The Zacks Consensus Estimate for HCI Group’s 2023 earnings implies a respective year-over-year rise of 116.7%.
Root delivered a trailing four-quarter average earnings surprise of 22.44%. In the past year, ROOT has lost 92.3%. In the past year, ROOT has lost 91.9%.
The Zacks Consensus Estimate for ROOT’s 2022 and 2023 earnings indicates a respective year-over-year increase of 44.7% and 23.9%.
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
Arthur J. Gallagher & Co. (AJG) : Free Stock Analysis Report
HCI Group, Inc. (HCI) : Free Stock Analysis Report
Kinsale Capital Group, Inc. (KNSL) : Free Stock Analysis Report
Root, Inc. (ROOT) : Free Stock Analysis Report
