Dodge & Cox Adds $1B in Arthur J. Gallagher & Co. ($AJG)
Dodge & Cox added 6.47 million shares of Arthur J. Gallagher, boosting its position by 735%.
Key Points
- Dodge & Cox increased its holdings in Arthur J. Gallagher by 6.47 million shares, a 735% rise, reaching a total of 7.35 million shares.
- Arthur J. Gallagher, trading at around $220.94, boasts a market cap of $56.65 billion and a forward P/E of 14.83.
- The company offers a 1.27% dividend yield with a payout ratio of 42.88%, and analysts have a buy consensus with a target price of $264.11.
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Dodge & Cox has significantly boosted its holdings in Arthur J. Gallagher & Co. (NYSE:AJG) according to its latest Form 13F filing with the SEC. The investment firm added 6,474,330 shares during the reporting period, increasing its stake by an impressive 735% to a total of 7,354,915 shares. This investment is valued at approximately $1.62 billion.
What Changed in Dodge & Cox's Arthur J. Gallagher Position
Dodge & Cox's recent move in Arthur J. Gallagher represents a substantial increase in its position. Previously holding 880,585 shares, the firm has now increased its holdings to 7,354,915 shares, marking a change of 6,474,330 shares. This strategic boost underscores a strong commitment to the insurance brokerage firm.
Arthur J. Gallagher & Co. Stock Down 15.7%
Shares of Arthur J. Gallagher, trading on the NYSE under the ticker AJG, were recently priced at about $220.94. The company has a market cap of approximately $56.65 billion, with a P/E ratio of 35.62 and a more attractive forward P/E of 14.83. Arthur J. Gallagher's stock has seen a 52-week range between $190.75 and $327.34, with a 50-day moving average of $210.76 and a 200-day moving average of $245.34. The company's beta of 0.533 suggests lower volatility compared to the broader market.
$AJG stock price
Daily closing prices, year to date. Not investment advice.
Recent Earnings
Arthur J. Gallagher reported revenues of $14.20 billion, with a revenue growth rate of 34.6%. The company's net margin stands at 11.35%, and it achieved a return on equity of 7.01%. With an EPS of $6.19, Arthur J. Gallagher is set to announce its next earnings on April 30, 2026.
Earnings drift grade
Outlook vs expectations on the last report — not price action.
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Forward outlook
5 target cuts vs 0 raises.
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EPS & revenue
EPS met estimates. Revenue missed estimates by 0.5%.
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Profit surprise
EBITDA missed by 13 percent. Operating income missed by 27 percent.
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Pre-earnings setup
Expectations were about average.
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Analyst signal
1 upgrade, 5 target cuts.
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Earnings quality
Gross margin up 36.8 points. Operating margin down 2.5 points. Positive free cash flow.
Earnings Call Summary
Gallagher delivered a strong first quarter with 28 percent total revenue growth, driven by 5 percent organic growth plus 23 percent from the AssuredPartners acquisition. The company beat on EPS at 4.47 dollars per share versus 4.40 dollars expected, and expanded brokerage margins by 50 basis points. Management said their new business hit ratio improved to 45 percent from 32 percent historically using digital tools, and they are confident about durability even as property pricing moderates.
Guidance Management reaffirmed its full year outlook for organic growth of 6 percent and underlying margin expansion of 40 to 60 basis points. They expect second quarter brokerage organic growth of 5 percent and full year of 5.5 percent, with property pricing remaining down about 7 percent but offset by strength in casualty and benefits.
Severe negative reset. The report materially damaged the forward outlook and likely forces major downward revisions.
Dividend
Arthur J. Gallagher offers a dividend rate of $2.80 per share, yielding 1.27%. The dividend payout ratio is 42.88%, indicating a healthy balance between returning income to shareholders and retaining earnings for growth.
About Arthur J. Gallagher & Co.
Arthur J. Gallagher & Co., based in Rolling Meadows, Illinois, provides insurance and reinsurance brokerage, consulting, and claims settlement services worldwide. The company operates through its Brokerage and Risk Management segments, offering services such as insurance placement, risk management, and employer-sponsored benefit programs. Founded in 1927, it is led by CEO J. Patrick Gallagher Jr. and employs over 72,000 people.
Bottom Line
Dodge & Cox's significant increase in its stake in Arthur J. Gallagher highlights the firm's confidence in the insurance broker's prospects. While 13F filings are backward-looking, they offer insight into institutional sentiment. Investors often watch these moves to gauge potential trends in the market.
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