FMP
Aug 06, 2025
Arthur J. Gallagher & Co. (NYSE:AJG) is a global insurance brokerage and risk management services firm. It competes with other firms in the insurance and financial services industry, such as American Financial Group, Inc. (AFG) and Apollo Tactical Income Fund Inc. (AIF).
In evaluating AJG's financial performance, the Return on Invested Capital (ROIC) is a key metric. AJG's ROIC is 5.44%, which is below its Weighted Average Cost of Capital (WACC) of 6.35%. This indicates that AJG is not currently generating returns that exceed its cost of capital, suggesting limited value creation for shareholders.
Comparatively, American Financial Group, Inc. (AFG) shows a strong ROIC of 27.67% against a WACC of 6.86%, resulting in a ROIC to WACC ratio of 4.03. This suggests AFG is effectively using its capital to generate returns well above its cost, indicating strong value creation.
Armada Hoffler Properties, Inc. (AHH) also demonstrates effective capital utilization with a ROIC of 30.23% and a WACC of 6.15%, leading to a ROIC to WACC ratio of 4.91. This performance highlights AHH's ability to generate substantial returns on its invested capital.
Asbury Automotive Group, Inc. (ABG) stands out with a remarkable ROIC of 99.45% and a WACC of 5.73%, resulting in a ROIC to WACC ratio of 17.35. This indicates ABG's exceptional ability to generate returns far exceeding its cost of capital, making it a leader in value creation among its peers.
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