AJGNEUTRAL

Return on Equity (ROE)

6.4%

Higher than 10% of Financial Services sector peers

Updated 1924h ago

Sector Performance

10th percentile

AJG

6.4%

Sector Median

12.9%

Sector Avg

17.5%

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Deep Analysis

Return on Equity (ROE) measures how much profit a company generates for each dollar of shareholders' equity — a 6.4% ROE means Arthur J.

Gallagher earns $0.064 for every dollar of equity. That figure of 6.4% places it well below the sector median of 13.9%, ranking in the 16th percentile among Financial Services peers. The year-over-year change is unavailable, and the quarter-over-quarter change is also unavailable, with no trend data for the last eight quarters. The combination of a low ROE relative to peers and the absence of any trend data offers no clear signal of improvement or deterioration, raising questions about the company's efficiency in using equity to generate profits. This weak level of ROE, without a supportive trend, suggests a potential risk for investors seeking strong capital returns. The metric contradicts the overall NEUTRAL verdict, as the poor relative performance leans toward a more cautious assessment.

Frequently Asked Questions

What does the Return on Equity (ROE) tell investors about AJG?

ROE measures how effectively management turns equity into profit. Consistently above 15% is typically considered strong. Negative equity distorts this metric.

How is the Return on Equity (ROE) calculated?

Return on Equity (ROE) is calculated as: Net Income / Shareholders' Equity.

How does AJG's Return on Equity (ROE) compare to its sector?

AJG's Return on Equity (ROE) of 6.4% compares to a Financial Services sector median of 12.9%, placing it in the 10th percentile.

Who are AJG's closest peers by Return on Equity (ROE)?

The closest Financial Services peers by Return on Equity (ROE) include: AFL (12.4%), ARES (12.3%), BLK (11.9%), RF (11.9%), HSBC (11.6%).

The Formula

Net Income / Shareholders' Equity

Why It Matters

ROE measures how effectively management turns equity into profit. Consistently above 15% is typically considered strong. Negative equity distorts this metric.