eHealth (EHTH) & Arthur J. Gallagher & Co. (NYSE:AJG) Financial Contrast

eHealth (NASDAQ: EHTH) and Arthur J. Gallagher & Co. (NYSE:AJG) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitabiliy, risk, earnings and valuation.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
eHealth $192.05 million 1.81 $7.13 million $0.55 34.26
Arthur J. Gallagher & Co. $5.65 billion 1.83 $881.10 million $2.37 24.26

Arthur J. Gallagher & Co. has higher revenue and earnings than eHealth. Arthur J. Gallagher & Co. is trading at a lower price-to-earnings ratio than eHealth, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

eHealth has a beta of 1.59, meaning that its stock price is 59% more volatile than the S&P 500. Comparatively, Arthur J. Gallagher & Co. has a beta of 1.19, meaning that its stock price is 19% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for eHealth and Arthur J. Gallagher & Co., as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
eHealth 0 1 3 0 2.75
Arthur J. Gallagher & Co. 2 3 6 0 2.36

eHealth currently has a consensus target price of $17.50, indicating a potential downside of 7.11%. Arthur J. Gallagher & Co. has a consensus target price of $57.00, indicating a potential downside of 0.87%. Given Arthur J. Gallagher & Co.’s higher possible upside, analysts plainly believe Arthur J. Gallagher & Co. is more favorable than eHealth.

Institutional and Insider Ownership

93.5% of eHealth shares are owned by institutional investors. Comparatively, 82.7% of Arthur J. Gallagher & Co. shares are owned by institutional investors. 3.3% of eHealth shares are owned by company insiders. Comparatively, 1.6% of Arthur J. Gallagher & Co. shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

Arthur J. Gallagher & Co. pays an annual dividend of $1.56 per share and has a dividend yield of 2.7%. eHealth does not pay a dividend. Arthur J. Gallagher & Co. pays out 65.8% of its earnings in the form of a dividend. eHealth has increased its dividend for 6 consecutive years.

Profitability

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

Net Margins Return on Equity Return on Assets
eHealth 5.47% 11.84% 9.45%
Arthur J. Gallagher & Co. 7.42% 13.56% 4.37%

Summary

Arthur J. Gallagher & Co. beats eHealth on 9 of the 17 factors compared between the two stocks.

eHealth Company Profile

eHealth, Inc. provides a private online source of health insurance for individuals, families and small businesses. The Company is the parent company of eHealthInsurance, a private health insurance exchange where individuals, families and small businesses can compare health insurance products from various insurers side-by-side, and purchase and enroll in coverage online through its Websites (www.eHealth.com, www.eHealthInsurance.com, www.eHealthMedicare.com, www.Medicare.com and www.PlanPrescriber.com) or telephonically through its customer care centers. The Company also offers various online and pharmacy-based tools to help seniors navigate Medicare health insurance options, choose the right plan, and enroll in plans online or telephonically. It markets the availability of individual and family, small business and ancillary health insurance plans of various insurance carriers through its e-commerce platforms (www.eHealth.com and www.eHealthInsurance.com).

Arthur J. Gallagher & Co. Company Profile

Arthur J. Gallagher & Co. and its subsidiaries are engaged in providing insurance brokerage and consulting services, and third-party claims settlement and administration services to both domestic and international entities. The Company operates through three segments: brokerage, risk management and corporate. The brokerage segment primarily consists of retail and wholesale insurance brokerage operations. Its retail brokerage operations negotiate and place property/casualty, employer-provided health and welfare insurance, and healthcare exchange and retirement solutions principally for middle-market commercial, industrial, public entity, religious and not-for-profit entities. The risk management segment provides contract claim settlement and administration services for enterprises that choose to self-insure some or all of their property/casualty coverages and for insurance companies that choose to outsource some or all of their property/casualty claims departments.

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