AON PLC-CLASS A (AON) Stock Fundamental Analysis
NYSE:AON - New York Stock Exchange, Inc. - IE00BLP1HW54 - Common Stock - Currency: USD
Taking everything into account, AON scores 5 out of 10 in our fundamental rating. AON was compared to 145 industry peers in the Insurance industry. AON has an excellent profitability rating, but there are concerns on its financial health. While showing a medium growth rate, AON is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
In the past year AON was profitable.
In the past year AON had a positive cash flow from operations.
In the past 5 years AON has always been profitable.
In the past 5 years AON always reported a positive cash flow from operatings.
1.2 Ratios
AON has a better Return On Assets (5.07%) than 88.28% of its industry peers.
AON has a better Return On Equity (36.38%) than 98.62% of its industry peers.
With an excellent Return On Invested Capital value of 12.01%, AON belongs to the best of the industry, outperforming 97.93% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for AON is significantly above the industry average of 4.07%.
The 3 year average ROIC (20.44%) for AON is well above the current ROIC(12.01%). The reason for the recent decline needs to be investigated.
| 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's Profit Margin of 15.58% is amongst the best of the industry. AON outperforms 82.76% of its industry peers.
AON's Profit Margin has improved in the last couple of years.
The Operating Margin of AON (25.74%) is better than 92.41% of its industry peers.
In the last couple of years the Operating Margin of AON has grown nicely.
AON has a better Gross Margin (47.12%) than 94.48% 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
AON has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
The number of shares outstanding for AON has been increased compared to 1 year ago.
The number of shares outstanding for AON has been reduced compared to 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.
With an excellent Altman-Z score value of 1.64, AON belongs to the best of the industry, outperforming 88.97% of the companies in the same industry.
AON has a debt to FCF ratio of 6.68. This is a slightly negative value and a sign of low solvency as AON would need 6.68 years to pay back of all of its debts.
AON's Debt to FCF ratio of 6.68 is on the low side compared to the rest of the industry. AON is outperformed by 67.59% of its industry peers.
AON has a Debt/Equity ratio of 2.52. This is a high value indicating a heavy dependency on external financing.
AON's Debt to Equity ratio of 2.52 is on the low side compared to the rest of the industry. AON is outperformed by 91.72% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.52 | ||
| Debt/FCF | 6.68 | ||
| Altman-Z | 1.64 |
ROIC/WACC1.73
WACC6.94%
2.3 Liquidity
A Current Ratio of 1.05 indicates that AON should not have too much problems paying its short term obligations.
AON has a Current ratio of 1.05. This is in the better half of the industry: AON outperforms 80.00% 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.
AON has a Quick ratio of 1.05. This is in the better half of the industry: AON outperforms 80.00% 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!
The Revenue has been growing slightly by 7.35% on average over the past years.
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
AON is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 10.38% yearly.
The Revenue is expected to grow by 5.74% on average over the next years.
EPS Next Y8.23%
EPS Next 2Y10.7%
EPS Next 3Y10.69%
EPS Next 5Y10.38%
Revenue Next Year9.61%
Revenue Next 2Y8.04%
Revenue Next 3Y7.3%
Revenue Next 5Y5.74%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
AON is valuated rather expensively with a Price/Earnings ratio of 22.62.
67.59% of the companies in the same industry are cheaper than AON, based on the Price/Earnings ratio.
AON's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.50.
With a Price/Forward Earnings ratio of 18.47, AON is valued on the expensive side.
Based on the Price/Forward Earnings ratio, AON is valued a bit more expensive than 68.28% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 36.44. AON is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.62 | ||
| Fwd PE | 18.47 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as AON.
70.34% of the companies in the same industry are cheaper than AON, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.13 | ||
| EV/EBITDA | 15.43 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates AON does not grow enough to justify the current Price/Earnings ratio.
AON has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.75
PEG (5Y)1.98
EPS Next 2Y10.7%
EPS Next 3Y10.69%
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 3.76.
With a Dividend Yield of 0.83, AON pays less dividend than the S&P500 average, which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.83% |
5.2 History
On average, the dividend of AON grows each year by 9.31%, which is quite nice.
AON has paid a dividend for at least 10 years, which is 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 2Y10.7%
EPS Next 3Y10.69%
356.11
+1.48 (+0.42%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners89.86%
Inst Owner Change0%
Ins Owners1.08%
Ins Owner Change3.69%
Market Cap76.90B
Analysts70
Price Target406.78 (14.23%)
Short Float %2.47%
Short Ratio4.14
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)0%
PT rev (3m)-2.37%
EPS NQ rev (1m)0.11%
EPS NQ rev (3m)-1.14%
EPS NY rev (1m)0.05%
EPS NY rev (3m)-1.96%
Revenue NQ rev (1m)0.1%
Revenue NQ rev (3m)0.07%
Revenue NY rev (1m)0.03%
Revenue NY rev (3m)-0.5%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.62 | ||
| Fwd PE | 18.47 | ||
| P/S | 4.7 | ||
| P/FCF | 29.13 | ||
| P/OCF | 26.83 | ||
| P/B | 10.98 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.43 |
EPS(TTM)15.74
EY4.42%
EPS(NY)19.28
Fwd EY5.41%
FCF(TTM)12.23
FCFY3.43%
OCF(TTM)13.27
OCFY3.73%
SpS75.75
BVpS32.43
TBVpS-72.05
PEG (NY)2.75
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
WACC6.94%
ROIC/WACC1.73
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 Y8.23%
EPS Next 2Y10.7%
EPS Next 3Y10.69%
EPS Next 5Y10.38%
Revenue 1Y (TTM)20.49%
Revenue growth 3Y8.79%
Revenue growth 5Y7.35%
Sales Q2Q%16.19%
Revenue Next Year9.61%
Revenue Next 2Y8.04%
Revenue Next 3Y7.3%
Revenue Next 5Y5.74%
EBIT growth 1Y4.47%
EBIT growth 3Y26.43%
EBIT growth 5Y10.02%
EBIT Next Year18.69%
EBIT Next 3Y11.35%
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%