AJG vs. XP: A Head-to-Head Stock Comparison
Updated onHere’s a clear look at AJG and XP, comparing key factors like historical performance, profitability, financial strength, growth, dividend, and valuation.
Company Overview
AJG’s market capitalization of 81.47 billion USD is substantially larger than XP’s 10.43 billion USD, indicating a significant difference in their market valuations.
XP carries a higher beta at 1.17, indicating it’s more sensitive to market moves, while AJG (beta: 0.75) exhibits greater stability.
| Symbol | AJG | XP |
|---|---|---|
| Company Name | Arthur J. Gallagher & Co. | XP Inc. |
| Country | US | BR |
| Sector | Financial Services | Financial Services |
| Industry | Insurance - Brokers | Financial - Capital Markets |
| CEO | J. Patrick Gallagher Jr. | Thiago Maffra |
| Price | 318.1 USD | 19.8 USD |
| Market Cap | 81.47 billion USD | 10.43 billion USD |
| Beta | 0.75 | 1.17 |
| Exchange | NYSE | NASDAQ |
| IPO Date | June 20, 1984 | December 11, 2019 |
| ADR | No | No |
Historical Performance
This chart compares the performance of AJG and XP by tracking the growth of an initial $10,000 investment in each. Use the tabs to select the desired time period.
Data is adjusted for dividends and splits.
Profitability
Return on Equity
AJG
9.41%
Insurance - Brokers Industry
- Max
- 40.40%
- Q3
- 30.52%
- Median
- 22.48%
- Q1
- 4.38%
- Min
- -5.38%
AJG’s Return on Equity of 9.41% is on par with the norm for the Insurance - Brokers industry, indicating its profitability relative to shareholder equity is typical for the sector.
XP
22.91%
Financial - Capital Markets Industry
- Max
- 42.02%
- Q3
- 20.69%
- Median
- 13.73%
- Q1
- 3.33%
- Min
- -21.32%
In the upper quartile for the Financial - Capital Markets industry, XP’s Return on Equity of 22.91% signals a highly effective use of shareholder capital to drive profitability compared to most of its peers.
Return on Invested Capital
AJG
5.85%
Insurance - Brokers Industry
- Max
- 11.62%
- Q3
- 11.18%
- Median
- 8.38%
- Q1
- 2.57%
- Min
- -1.51%
AJG’s Return on Invested Capital of 5.85% is in line with the norm for the Insurance - Brokers industry, reflecting a standard level of efficiency in generating profits from its capital base.
XP
-1.71%
Financial - Capital Markets Industry
- Max
- 30.24%
- Q3
- 13.34%
- Median
- 6.20%
- Q1
- -1.71%
- Min
- -16.91%
Return on Invested Capital is often not a primary measure of capital efficiency in the Financial - Capital Markets industry.
Net Profit Margin
AJG
12.96%
Insurance - Brokers Industry
- Max
- 21.33%
- Q3
- 15.86%
- Median
- 10.63%
- Q1
- 1.06%
- Min
- -2.28%
AJG’s Net Profit Margin of 12.96% is aligned with the median group of its peers in the Insurance - Brokers industry. This indicates its ability to convert revenue into profit is typical for the sector.
XP
63.34%
Financial - Capital Markets Industry
- Max
- 28.67%
- Q3
- 13.52%
- Median
- 10.47%
- Q1
- 0.24%
- Min
- -9.55%
XP’s Net Profit Margin of 63.34% is exceptionally high, placing it well beyond the typical range for the Financial - Capital Markets industry. This demonstrates outstanding operational efficiency and a strong competitive advantage in converting revenue into profit.
Operating Profit Margin
AJG
23.06%
Insurance - Brokers Industry
- Max
- 28.73%
- Q3
- 23.24%
- Median
- 21.46%
- Q1
- 10.89%
- Min
- 5.35%
AJG’s Operating Profit Margin of 23.06% is around the midpoint for the Insurance - Brokers industry, indicating that its efficiency in managing core business operations is typical for the sector.
XP
-53.85%
Financial - Capital Markets Industry
- Max
- 56.86%
- Q3
- 25.29%
- Median
- 15.90%
- Q1
- 0.51%
- Min
- -19.18%
XP has a negative Operating Profit Margin of -53.85%. This signifies the company is unprofitable at the operational level, as its core business expenses exceed its revenue.
Profitability at a Glance
| Symbol | AJG | XP |
|---|---|---|
| Return on Equity (TTM) | 9.41% | 22.91% |
| Return on Assets (TTM) | 2.10% | 1.35% |
| Return on Invested Capital (TTM) | 5.85% | -1.71% |
| Net Profit Margin (TTM) | 12.96% | 63.34% |
| Operating Profit Margin (TTM) | 23.06% | -53.85% |
| Gross Profit Margin (TTM) | 55.08% | 30.86% |
Financial Strength
Current Ratio
AJG
1.44
Insurance - Brokers Industry
- Max
- 1.90
- Q3
- 1.76
- Median
- 1.29
- Q1
- 1.14
- Min
- 1.05
AJG’s Current Ratio of 1.44 aligns with the median group of the Insurance - Brokers industry, indicating that its short-term liquidity is in line with its sector peers.
XP
0.57
Financial - Capital Markets Industry
- Max
- 4.60
- Q3
- 3.24
- Median
- 1.32
- Q1
- 0.96
- Min
- 0.05
For the Financial - Capital Markets industry, the Current Ratio is often not the most suitable measure of short-term liquidity.
Debt-to-Equity Ratio
AJG
0.04
Insurance - Brokers Industry
- Max
- 4.59
- Q3
- 2.12
- Median
- 0.59
- Q1
- 0.07
- Min
- 0.01
Falling into the lower quartile for the Insurance - Brokers industry, AJG’s Debt-to-Equity Ratio of 0.04 points to a conservative financing strategy. This results in lower financial risk but potentially limits strategic investments compared to more leveraged competitors.
XP
2.75
Financial - Capital Markets Industry
- Max
- 3.63
- Q3
- 1.68
- Median
- 0.37
- Q1
- 0.09
- Min
- 0.00
XP’s leverage is in the upper quartile of the Financial - Capital Markets industry, with a Debt-to-Equity Ratio of 2.75. While this approach can boost equity growth, it also exposes the company to greater financial vulnerability.
Interest Coverage Ratio
AJG
29.40
Insurance - Brokers Industry
- Max
- 29.40
- Q3
- 16.65
- Median
- 7.25
- Q1
- 4.20
- Min
- 1.60
AJG’s Interest Coverage Ratio of 29.40 is in the upper quartile for the Insurance - Brokers industry, signifying a strong and healthy capacity to meet its interest payments from operating profits.
XP
-5.17
Financial - Capital Markets Industry
- Max
- 12.71
- Q3
- 7.94
- Median
- 1.92
- Q1
- 0.24
- Min
- -7.71
The Interest Coverage Ratio is often not a primary indicator of debt servicing capacity in the Financial - Capital Markets industry.
Financial Strength at a Glance
| Symbol | AJG | XP |
|---|---|---|
| Current Ratio (TTM) | 1.44 | 0.57 |
| Quick Ratio (TTM) | 1.44 | 0.57 |
| Debt-to-Equity Ratio (TTM) | 0.04 | 2.75 |
| Debt-to-Asset Ratio (TTM) | 0.01 | 0.17 |
| Net Debt-to-EBITDA Ratio (TTM) | -4.68 | 8.10 |
| Interest Coverage Ratio (TTM) | 29.40 | -5.17 |
Growth
The following charts compare key year-over-year (YoY) growth metrics for AJG and XP. These metrics are based on the companies’ annual financial reports.
Revenue Growth
Earnings Per Share (EPS) Growth
Free Cash Flow Growth
Dividend
Dividend Yield
AJG
0.79%
Insurance - Brokers Industry
- Max
- 2.63%
- Q3
- 1.34%
- Median
- 0.79%
- Q1
- 0.00%
- Min
- 0.00%
AJG’s Dividend Yield of 0.79% is consistent with its peers in the Insurance - Brokers industry, providing a dividend return that is standard for its sector.
XP
3.28%
Financial - Capital Markets Industry
- Max
- 5.86%
- Q3
- 1.74%
- Median
- 0.79%
- Q1
- 0.00%
- Min
- 0.00%
With a Dividend Yield of 3.28%, XP offers a more attractive income stream than most of its peers in the Financial - Capital Markets industry, signaling a strong commitment to shareholder returns.
Dividend Payout Ratio
AJG
35.97%
Insurance - Brokers Industry
- Max
- 45.22%
- Q3
- 39.19%
- Median
- 29.49%
- Q1
- 3.85%
- Min
- 0.00%
AJG’s Dividend Payout Ratio of 35.97% is within the typical range for the Insurance - Brokers industry, suggesting a balanced approach between shareholder payouts and company reinvestment.
XP
43.17%
Financial - Capital Markets Industry
- Max
- 128.06%
- Q3
- 43.11%
- Median
- 12.56%
- Q1
- 0.00%
- Min
- 0.00%
XP’s Dividend Payout Ratio of 43.17% is in the upper quartile for the Financial - Capital Markets industry. This indicates a strong commitment to shareholder returns but also suggests that a smaller portion of earnings is retained for reinvestment compared to many peers.
Dividend at a Glance
| Symbol | AJG | XP |
|---|---|---|
| Dividend Yield (TTM) | 0.79% | 3.28% |
| Dividend Payout Ratio (TTM) | 35.97% | 43.17% |
Valuation
Price-to-Earnings Ratio
AJG
46.21
Insurance - Brokers Industry
- Max
- 45.50
- Q3
- 35.20
- Median
- 30.00
- Q1
- 28.34
- Min
- 26.42
At 46.21, AJG’s P/E Ratio is exceptionally high, exceeding the typical maximum for the Insurance - Brokers industry. This suggests the stock may be significantly overvalued compared to its peers and implies high market expectations that could be difficult to meet.
XP
12.27
Financial - Capital Markets Industry
- Max
- 42.65
- Q3
- 29.09
- Median
- 20.52
- Q1
- 14.58
- Min
- 8.28
In the lower quartile for the Financial - Capital Markets industry, XP’s P/E Ratio of 12.27 suggests the stock may be undervalued compared to its peers, potentially presenting an attractive entry point for investors.
Forward P/E to Growth Ratio
AJG
3.32
Insurance - Brokers Industry
- Max
- 3.32
- Q3
- 3.00
- Median
- 2.77
- Q1
- 2.41
- Min
- 2.09
AJG’s Forward PEG Ratio of 3.32 is exceptionally high for the Insurance - Brokers industry. This suggests its stock price is very high relative to its expected earnings growth, signaling significant overvaluation risk.
XP
-0.12
Financial - Capital Markets Industry
- Max
- 4.05
- Q3
- 2.46
- Median
- 1.52
- Q1
- 0.78
- Min
- 0.02
XP has a negative Forward PEG Ratio of -0.12. This typically results from negative earnings or forecasts of declining future earnings, making the ratio not meaningful for valuation.
Price-to-Sales Ratio
AJG
6.77
Insurance - Brokers Industry
- Max
- 7.38
- Q3
- 5.34
- Median
- 4.27
- Q1
- 2.32
- Min
- 0.27
AJG’s P/S Ratio of 6.77 is in the upper echelon for the Insurance - Brokers industry. This means the company is valued richly on its revenue stream compared to its peers, suggesting the stock is priced for a high level of future performance.
XP
7.59
Financial - Capital Markets Industry
- Max
- 14.34
- Q3
- 7.63
- Median
- 2.98
- Q1
- 1.50
- Min
- 0.04
The P/S Ratio is often not a primary valuation tool in the Financial - Capital Markets industry.
Price-to-Book Ratio
AJG
3.23
Insurance - Brokers Industry
- Max
- 10.90
- Q3
- 8.10
- Median
- 6.93
- Q1
- 4.15
- Min
- 1.12
AJG’s P/B Ratio of 3.23 is in the lower quartile for the Insurance - Brokers industry. From a value investing perspective, this is favorable, as it suggests the stock is trading at a discount to its net asset value and may offer a greater margin of safety.
XP
2.75
Financial - Capital Markets Industry
- Max
- 9.60
- Q3
- 6.00
- Median
- 2.91
- Q1
- 1.84
- Min
- 0.53
XP’s P/B Ratio of 2.75 is within the conventional range for the Financial - Capital Markets industry. This shows a balanced market view, where the stock’s price is neither at a significant premium nor a discount to the book value of its peers.
Valuation at a Glance
| Symbol | AJG | XP |
|---|---|---|
| Price-to-Earnings Ratio (P/E, TTM) | 46.21 | 12.27 |
| Forward PEG Ratio (TTM) | 3.32 | -0.12 |
| Price-to-Sales Ratio (P/S, TTM) | 6.77 | 7.59 |
| Price-to-Book Ratio (P/B, TTM) | 3.23 | 2.75 |
| Price-to-Free Cash Flow Ratio (P/FCF, TTM) | 32.26 | 4.86 |
| EV-to-EBITDA (TTM) | 19.36 | 17.32 |
| EV-to-Sales (TTM) | 5.46 | 14.26 |