AON PLC-CLASS A (AON) Stock Fundamental Analysis
NYSE:AON - New York Stock Exchange, Inc. - IE00BLP1HW54 - Common Stock - Currency: USD
Overall AON gets a fundamental rating of 5 out of 10. We evaluated AON against 143 industry peers in the Insurance industry. AON scores excellent on profitability, but there are concerns on its financial health. AON is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
AON had positive earnings in the past year.
In the past year AON had a positive cash flow from operations.
AON had positive earnings in each of the past 5 years.
In the past 5 years AON always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of AON (5.07%) is better than 88.81% of its industry peers.
AON's Return On Equity of 36.38% is amongst the best of the industry. AON outperforms 97.90% of its industry peers.
The Return On Invested Capital of AON (12.01%) is better than 97.90% of its industry peers.
AON had an Average Return On Invested Capital over the past 3 years of 20.44%. This is significantly above the industry average of 4.27%.
The last Return On Invested Capital (12.01%) for AON is well below the 3 year average (20.44%), which needs to be investigated, but indicates that AON had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.07% | ||
| ROE | 36.38% | ||
| ROIC | 12.01% |
ROA(3y)6.96%
ROA(5y)6.19%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)20.44%
ROIC(5y)17.82%
1.3 Margins
AON has a Profit Margin of 15.58%. This is amongst the best in the industry. AON outperforms 83.22% of its industry peers.
In the last couple of years the Profit Margin of AON has grown nicely.
With an excellent Operating Margin value of 25.74%, AON belongs to the best of the industry, outperforming 90.91% of the companies in the same industry.
In the last couple of years the Operating Margin of AON has grown nicely.
The Gross Margin of AON (47.12%) is better than 94.41% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.74% | ||
| PM (TTM) | 15.58% | ||
| GM | 47.12% |
OM growth 3Y16.22%
OM growth 5Y2.49%
PM growth 3Y17.99%
PM growth 5Y3.98%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), AON is creating value.
AON has more shares outstanding than it did 1 year ago.
AON has less shares outstanding than it did 5 years ago.
AON has a worse debt/assets ratio than last year.
2.2 Solvency
AON has an Altman-Z score of 1.64. This is a bad value and indicates that AON is not financially healthy and even has some risk of bankruptcy.
AON has a better Altman-Z score (1.64) than 88.11% of its industry peers.
The Debt to FCF ratio of AON is 6.68, which is on the high side as it means it would take AON, 6.68 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 6.68, AON is not doing good in the industry: 68.53% of the companies in the same industry are doing better.
A Debt/Equity ratio of 2.52 is on the high side and indicates that AON has dependencies on debt financing.
AON has a Debt to Equity ratio of 2.52. This is amonst the worse of the industry: AON underperforms 93.01% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.52 | ||
| Debt/FCF | 6.68 | ||
| Altman-Z | 1.64 |
ROIC/WACC1.7
WACC7.08%
2.3 Liquidity
AON has a Current Ratio of 1.05. This is a normal value and indicates that AON is financially healthy and should not expect problems in meeting its short term obligations.
AON has a Current ratio of 1.05. This is in the better half of the industry: AON outperforms 79.02% of its industry peers.
AON has a Quick Ratio of 1.05. This is a normal value and indicates that AON is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of AON (1.05) is better than 79.02% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.05 | ||
| Quick Ratio | 1.05 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 7.59% over the past year.
The Earnings Per Share has been growing by 11.42% on average over the past years. This is quite good.
The Revenue has grown by 20.49% in the past year. This is a very strong growth!
Measured over the past years, AON shows a small growth in Revenue. The Revenue has been growing by 7.35% on average per year.
EPS 1Y (TTM)7.59%
EPS 3Y9.38%
EPS 5Y11.42%
EPS Q2Q%0.18%
Revenue 1Y (TTM)20.49%
Revenue growth 3Y8.79%
Revenue growth 5Y7.35%
Sales Q2Q%16.19%
3.2 Future
The Earnings Per Share is expected to grow by 10.38% on average over the next years. This is quite good.
The Revenue is expected to grow by 6.02% on average over the next years.
EPS Next Y8.18%
EPS Next 2Y10.34%
EPS Next 3Y10.25%
EPS Next 5Y10.38%
Revenue Next Year9.58%
Revenue Next 2Y7.84%
Revenue Next 3Y7.14%
Revenue Next 5Y6.02%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 22.65, the valuation of AON can be described as rather expensive.
AON's Price/Earnings ratio is a bit more expensive when compared to the industry. AON is more expensive than 68.53% of the companies in the same industry.
AON's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 25.82.
With a Price/Forward Earnings ratio of 18.62, AON is valued on the expensive side.
Based on the Price/Forward Earnings ratio, AON is valued a bit more expensive than the industry average as 68.53% of the companies are valued more cheaply.
AON's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 21.76.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.65 | ||
| Fwd PE | 18.62 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as AON.
Based on the Price/Free Cash Flow ratio, AON is valued a bit more expensive than 72.73% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.16 | ||
| EV/EBITDA | 15.45 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of AON may justify a higher PE ratio.
PEG (NY)2.77
PEG (5Y)1.98
EPS Next 2Y10.34%
EPS Next 3Y10.25%
5. Dividend
5.1 Amount
With a yearly dividend of 0.83%, AON is not a good candidate for dividend investing.
AON's Dividend Yield is slightly below the industry average, which is at 3.18.
With a Dividend Yield of 0.83, AON pays less dividend than the S&P500 average, which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.83% |
5.2 History
The dividend of AON is nicely growing with an annual growth rate of 9.31%!
AON has been paying a dividend for at least 10 years, so it has a reliable track record.
AON has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)9.31%
Div Incr Years5
Div Non Decr Years5
5.3 Sustainability
AON pays out 23.00% of its income as dividend. This is a sustainable payout ratio.
The dividend of AON is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP23%
EPS Next 2Y10.34%
EPS Next 3Y10.25%
356.54
+1.21 (+0.34%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners89.27%
Inst Owner Change2.17%
Ins Owners1.07%
Ins Owner Change3.39%
Market Cap76.99B
Analysts69.23
Price Target407.36 (14.25%)
Short Float %2.32%
Short Ratio3.18
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.83% |
Yearly Dividend2.71
Dividend Growth(5Y)9.31%
DP23%
Div Incr Years5
Div Non Decr Years5
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-1.89%
Min EPS beat(2)-6.82%
Max EPS beat(2)3.03%
EPS beat(4)2
Avg EPS beat(4)-0.24%
Min EPS beat(4)-6.82%
Max EPS beat(4)8.73%
EPS beat(8)3
Avg EPS beat(8)-1.42%
EPS beat(12)6
Avg EPS beat(12)-0.64%
EPS beat(16)9
Avg EPS beat(16)1.54%
Revenue beat(2)0
Avg Revenue beat(2)-3%
Min Revenue beat(2)-3.71%
Max Revenue beat(2)-2.29%
Revenue beat(4)0
Avg Revenue beat(4)-1.63%
Min Revenue beat(4)-3.71%
Max Revenue beat(4)-0.27%
Revenue beat(8)1
Avg Revenue beat(8)-1.1%
Revenue beat(12)1
Avg Revenue beat(12)-1.44%
Revenue beat(16)3
Avg Revenue beat(16)-0.85%
PT rev (1m)-2.23%
PT rev (3m)2.74%
EPS NQ rev (1m)-1.18%
EPS NQ rev (3m)-1.33%
EPS NY rev (1m)-1.94%
EPS NY rev (3m)-2.05%
Revenue NQ rev (1m)-0.05%
Revenue NQ rev (3m)0.1%
Revenue NY rev (1m)-0.53%
Revenue NY rev (3m)-0.89%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.65 | ||
| Fwd PE | 18.62 | ||
| P/S | 4.71 | ||
| P/FCF | 29.16 | ||
| P/OCF | 26.86 | ||
| P/B | 10.99 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.45 |
EPS(TTM)15.74
EY4.41%
EPS(NY)19.15
Fwd EY5.37%
FCF(TTM)12.23
FCFY3.43%
OCF(TTM)13.27
OCFY3.72%
SpS75.75
BVpS32.43
TBVpS-72.05
PEG (NY)2.77
PEG (5Y)1.98
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.07% | ||
| ROE | 36.38% | ||
| ROCE | 15.61% | ||
| ROIC | 12.01% | ||
| ROICexc | 17.06% | ||
| ROICexgc | N/A | ||
| OM | 25.74% | ||
| PM (TTM) | 15.58% | ||
| GM | 47.12% | ||
| FCFM | 16.14% |
ROA(3y)6.96%
ROA(5y)6.19%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)20.44%
ROIC(5y)17.82%
ROICexc(3y)47.15%
ROICexc(5y)39.19%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)26.44%
ROCE(5y)22.9%
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3Y-9.92%
ROICexc growth 5Y-6.94%
OM growth 3Y16.22%
OM growth 5Y2.49%
PM growth 3Y17.99%
PM growth 5Y3.98%
GM growth 3YN/A
GM growth 5YN/A
F-Score5
Asset Turnover0.33
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.52 | ||
| Debt/FCF | 6.68 | ||
| Debt/EBITDA | 3.47 | ||
| Cap/Depr | 25.95% | ||
| Cap/Sales | 1.38% | ||
| Interest Coverage | 5.04 | ||
| Cash Conversion | 56.4% | ||
| Profit Quality | 103.61% | ||
| Current Ratio | 1.05 | ||
| Quick Ratio | 1.05 | ||
| Altman-Z | 1.64 |
F-Score5
WACC7.08%
ROIC/WACC1.7
Cap/Depr(3y)68.15%
Cap/Depr(5y)56.12%
Cap/Sales(3y)1.61%
Cap/Sales(5y)1.45%
Profit Quality(3y)115.68%
Profit Quality(5y)128.84%
High Growth Momentum
Growth
EPS 1Y (TTM)7.59%
EPS 3Y9.38%
EPS 5Y11.42%
EPS Q2Q%0.18%
EPS Next Y8.18%
EPS Next 2Y10.34%
EPS Next 3Y10.25%
EPS Next 5Y10.38%
Revenue 1Y (TTM)20.49%
Revenue growth 3Y8.79%
Revenue growth 5Y7.35%
Sales Q2Q%16.19%
Revenue Next Year9.58%
Revenue Next 2Y7.84%
Revenue Next 3Y7.14%
Revenue Next 5Y6.02%
EBIT growth 1Y4.47%
EBIT growth 3Y26.43%
EBIT growth 5Y10.02%
EBIT Next Year17.96%
EBIT Next 3Y11.39%
EBIT Next 5Y7.11%
FCF growth 1Y-10.51%
FCF growth 3Y11.27%
FCF growth 5Y11.84%
OCF growth 1Y-10.41%
OCF growth 3Y11.63%
OCF growth 5Y10.59%