Head-To-Head Analysis: CorVel (CRVL) & Arthur J. Gallagher & Co. (AJG)

CorVel (NASDAQ: CRVL) and Arthur J. Gallagher & Co. (NYSE:AJG) are both business services companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, profitability, risk, analyst recommendations and institutional ownership.

Profitability

This table compares CorVel and Arthur J. Gallagher & Co.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CorVel 6.33% 23.74% 13.84%
Arthur J. Gallagher & Co. 10.34% 18.19% 5.63%

Valuation and Earnings

This table compares CorVel and Arthur J. Gallagher & Co.’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CorVel $518.69 million 1.95 $29.47 million N/A N/A
Arthur J. Gallagher & Co. $6.16 billion 2.02 $463.10 million $3.06 22.26

Arthur J. Gallagher & Co. has higher revenue and earnings than CorVel.

Analyst Ratings

This is a summary of recent ratings and target prices for CorVel and Arthur J. Gallagher & Co., as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CorVel 0 0 0 0 N/A
Arthur J. Gallagher & Co. 0 4 6 0 2.60

Arthur J. Gallagher & Co. has a consensus price target of $72.33, indicating a potential upside of 6.20%. Given Arthur J. Gallagher & Co.’s higher possible upside, analysts plainly believe Arthur J. Gallagher & Co. is more favorable than CorVel.

Risk and Volatility

CorVel has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500. Comparatively, Arthur J. Gallagher & Co. has a beta of 1.13, indicating that its share price is 13% more volatile than the S&P 500.

Dividends

Arthur J. Gallagher & Co. pays an annual dividend of $1.64 per share and has a dividend yield of 2.4%. CorVel does not pay a dividend. Arthur J. Gallagher & Co. pays out 53.6% of its earnings in the form of a dividend. Arthur J. Gallagher & Co. has increased its dividend for 7 consecutive years.

Insider and Institutional Ownership

43.9% of CorVel shares are held by institutional investors. Comparatively, 81.4% of Arthur J. Gallagher & Co. shares are held by institutional investors. 51.0% of CorVel shares are held by company insiders. Comparatively, 1.6% of Arthur J. Gallagher & Co. shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Arthur J. Gallagher & Co. beats CorVel on 10 of the 15 factors compared between the two stocks.

CorVel Company Profile

CorVel Corporation provides medical cost containment and managed care services to address the medical costs of workers' compensation benefits, automobile insurance claims, and group health insurance benefits. The company offers network solutions, including automated medical fee auditing, preferred provider management and reimbursement services, retrospective utilization review, facility claim review, professional review, pharmacy services, directed care services, medicare solutions, clearinghouse services, independent medical examinations, and inpatient medical bill review. It also provides a range of patient management services comprising claims management, case management, 24/7 nurse triage, utilization management, vocational rehabilitation, life care planning, disability management, liability claims management, and auto claims management services. It serves insurers, third party administrators, self-administered employers, government agencies, municipalities, state funds, and various other industries. CorVel Corporation was founded in 1987 and is based in Irvine, California.

Arthur J. Gallagher & Co. Company Profile

Arthur J. Gallagher & Co., together with its subsidiaries, provides insurance brokerage, consulting, and third party claims settlement and administration services to entities in the United States and internationally. Its Brokerage segment consists of retail and wholesale insurance brokerage operations. This segment offers retail brokerage services, which negotiate and place property/casualty, employer-provided health and welfare insurance, and retirement solutions primarily for middle-market commercial, industrial, public entity, religious, and not-for-profit entities. It also provides consulting, management, and administrative services. This segment's wholesale brokerage operations assist brokers and agents in the placement of specialized and hard-to-place insurance programs. It also acts as a brokerage wholesaler, and managing general agent or managing general underwriter distributing specialized insurance coverage's for underwriting enterprises; and performs activities, including marketing, underwriting, issuing policies, collecting premiums, appointing and supervising other agents, paying claims, and negotiating reinsurance. The company's Risk Management segment offers contract claim settlement, claim administration, loss control, and risk management consulting services for commercial, not-for-profit, and captive and public entities, as well as various other organizations that choose to self-insure their property/casualty coverage's; and for underwriting enterprises, which choose to outsource their property/casualty claims departments. This segment also offers integrated disability management programs, as well as information, risk control consulting, and appraisal services. The company offers its services through a network of correspondent insurance brokers and consultants. Arthur J. Gallagher & Co. was founded in 1927 and is headquartered in Rolling Meadows, Illinois.

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