The board of
Arthur J Gallagher & Co.
) approved a 2.9% increase in its quarterly cash dividend. The
insurance broker will now pay a quarterly dividend of 36 cents
per share, up from prior payout of 35 cents. The newly declared
dividend will be paid on Mar 20, 2014 to shareholders of record
as on Mar 4, 2014.
Based on yesterday's closing share price of $48.44, the increased
dividend of Arthur J Gallagher & Co. implies a dividend yield
of 2.97%, which is better than the industry average yield of
The dividend hike by Arthur J Gallagher & Co. was primarily
supported by its strong operating cash flow that allows the
company to engage in investments and successfully deploy excess
capital, thereby increasing returns of the shareholders. Overall,
the dividend increase reflects the company's strong capital
position and a consolidated balance sheet.
Arthur J Gallagher & Co. has been consistently distributing
additional profit among its shareholders through quarterly
dividends for the last few years. We note that the quarterly
dividend has increased at a 4-year CAGR of 2.99%.
Besides delivering dividends consistently, Arthur J Gallagher
& Co. is also focused on ramping up its inorganic growth
profile. It has made eleven acquisitions during the fourth
quarter of 2013 to augment its product and service offerings as
well as leverage its international footprint. With an expected
long-term growth for Arthur J Gallagher & Co. of 13.9%, we
believe these initiatives should aid higher earnings of the
company, going forward. Arthur J Gallagher & Co. is set to
release its fourth-quarter 2013 earnings results on Jan 28, 2014.
Among other insurance brokers,
Brown & Brown Inc.
) increased its quarterly dividend from 9 cents a share to 10
cents in Oct 2013.
Arthur J Gallagher & Co. presently carries a Zacks Rank #3
(Hold). Some better-ranked stocks worth considering in the
finance sector include
Lincoln National Corporation
Marsh & Mclennan Companies, Inc.
). Both these stocks carry a Zacks Rank #2 (Buy).
GALLAGHER ARTHU (AJG): Free Stock Analysis
BROWN & BROWN (BRO): Free Stock Analysis
LINCOLN NATL-IN (LNC): Free Stock Analysis
MARSH &MCLENNAN (MMC): Free Stock Analysis
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