Arthur J. Gallagher & Co. (NYSE:AJG – Get Free Report) and United Fire Group (NASDAQ:UFCS – Get Free Report) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitability, risk, valuation, analyst recommendations, institutional ownership and dividends.
Analyst Ratings
This is a summary of current recommendations for Arthur J. Gallagher & Co. and United Fire Group, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Arthur J. Gallagher & Co. | 0 | 5 | 14 | 0 | 2.74 |
| United Fire Group | 0 | 0 | 2 | 2 | 3.50 |
Arthur J. Gallagher & Co. presently has a consensus price target of $288.17, suggesting a potential upside of 27.41%. United Fire Group has a consensus price target of $52.50, suggesting a potential downside of 3.88%. Given Arthur J. Gallagher & Co.’s higher possible upside, analysts clearly believe Arthur J. Gallagher & Co. is more favorable than United Fire Group.
Volatility and Risk
Profitability
This table compares Arthur J. Gallagher & Co. and United Fire Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Arthur J. Gallagher & Co. | 9.96% | 13.28% | 4.03% |
| United Fire Group | 9.57% | 15.19% | 3.69% |
Institutional and Insider Ownership
85.5% of Arthur J. Gallagher & Co. shares are owned by institutional investors. Comparatively, 62.7% of United Fire Group shares are owned by institutional investors. 1.4% of Arthur J. Gallagher & Co. shares are owned by insiders. Comparatively, 6.1% of United Fire Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Dividends
Arthur J. Gallagher & Co. pays an annual dividend of $2.80 per share and has a dividend yield of 1.2%. United Fire Group pays an annual dividend of $0.80 per share and has a dividend yield of 1.5%. Arthur J. Gallagher & Co. pays out 46.4% of its earnings in the form of a dividend. United Fire Group pays out 14.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Arthur J. Gallagher & Co. has raised its dividend for 15 consecutive years. United Fire Group is clearly the better dividend stock, given its higher yield and lower payout ratio.
Earnings and Valuation
This table compares Arthur J. Gallagher & Co. and United Fire Group”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Arthur J. Gallagher & Co. | $13.94 billion | 4.16 | $1.49 billion | $6.03 | 37.51 |
| United Fire Group | $1.47 billion | 0.95 | $118.19 million | $5.38 | 10.15 |
Arthur J. Gallagher & Co. has higher revenue and earnings than United Fire Group. United Fire Group is trading at a lower price-to-earnings ratio than Arthur J. Gallagher & Co., indicating that it is currently the more affordable of the two stocks.
Summary
Arthur J. Gallagher & Co. beats United Fire Group on 12 of the 18 factors compared between the two stocks.
About Arthur J. Gallagher & Co.
Arthur J. Gallagher & Co. engages in the provision of insurance brokerage, reinsurance brokerage, consulting, and third-party claims settlement and administration services. It operates through the following segments: Brokerage, Risk Management, and Corporate. The Brokerage segment consists of retail and wholesale insurance brokerage operations. The Risk Management segment provides contract claim settlement and administration services. The Corporate segment manages clean energy and other investments. The company was founded by Arthur J. Gallagher in 1927 and is headquartered in Rolling Meadows, IL.
About United Fire Group
United Fire Group, Inc., together with its subsidiaries, provides property and casualty insurance for individuals and businesses in the United States. The company offers commercial and personal lines of property and casualty insurance; and reinsurance coverage for property and casualty insurance. Its commercial lines include fire and allied lines, other liability, automobile, workers’ compensation, fidelity and surety coverage, and other insurance products; and personal lines comprise automobile, and fire and allied lines coverage, including homeowners, as well as provides assumed reinsurance products. The company sells its products through a network of independent agencies. United Fire Group, Inc. was incorporated in 1946 and is headquartered in Cedar Rapids, Iowa.
Receive News & Ratings for Arthur J. Gallagher & Co. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Arthur J. Gallagher & Co. and related companies with MarketBeat.com's FREE daily email newsletter.
