AON PLC-CLASS A (AON) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:AON - IE00BLP1HW54 - Common Stock
338.69 USD
+2.73 (+0.81%)
338.69 USD
0 (0%)
Taking everything into account, AON scores 5 out of 10 in our fundamental rating. AON was compared to 149 industry peers in the Insurance industry. AON has an excellent profitability rating, but there are some minor 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.
- AON had a positive operating cash flow in the past year.
- AON had positive earnings in each of the past 5 years.
- AON had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- AON's Return On Assets of 5.26% is amongst the best of the industry. AON outperforms 85.23% of its industry peers.
- With an excellent Return On Equity value of 34.24%, AON belongs to the best of the industry, outperforming 98.66% of the companies in the same industry.
- Looking at the Return On Invested Capital, with a value of 13.63%, AON belongs to the top of the industry, outperforming 97.32% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for AON is significantly above the industry average of 14.92%.
- The 3 year average ROIC (20.44%) for AON is well above the current ROIC(13.63%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.26% | ||
| ROE | 34.24% | ||
| ROIC | 13.63% |
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
- With an excellent Profit Margin value of 15.96%, AON belongs to the best of the industry, outperforming 81.88% of the companies in the same industry.
- In the last couple of years the Profit Margin of AON has grown nicely.
- AON has a Operating Margin of 26.70%. This is amongst the best in the industry. AON outperforms 88.59% of its industry peers.
- In the last couple of years the Operating Margin of AON has grown nicely.
- With an excellent Gross Margin value of 47.22%, AON belongs to the best of the industry, outperforming 93.96% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 26.7% | ||
| PM (TTM) | 15.96% | ||
| GM | 47.22% |
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
- The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so AON is creating value.
- Compared to 1 year ago, AON has more shares outstanding
- Compared to 5 years ago, AON has less shares outstanding
- The debt/assets ratio for AON is higher compared to a year ago.
2.2 Solvency
- AON has an Altman-Z score of 1.60. 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 1.60, AON belongs to the best of the industry, outperforming 86.58% of the companies in the same industry.
- AON has a debt to FCF ratio of 5.52. This is a neutral value as AON would need 5.52 years to pay back of all of its debts.
- Looking at the Debt to FCF ratio, with a value of 5.52, AON is doing worse than 64.43% of the companies in the same industry.
- AON has a Debt/Equity ratio of 1.95. This is a high value indicating a heavy dependency on external financing.
- AON has a worse Debt to Equity ratio (1.95) than 91.95% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.95 | ||
| Debt/FCF | 5.52 | ||
| Altman-Z | 1.6 |
ROIC/WACC1.94
WACC7.02%
2.3 Liquidity
- AON has a Current Ratio of 1.06. 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 better Current ratio (1.06) than 79.87% of its industry peers.
- A Quick Ratio of 1.06 indicates that AON should not have too much problems paying its short term obligations.
- AON has a better Quick ratio (1.06) than 79.87% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.06 | ||
| Quick Ratio | 1.06 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 9.41% over the past year.
- The Earnings Per Share has been growing by 11.42% on average over the past years. This is quite good.
- Looking at the last year, AON shows a quite strong growth in Revenue. The Revenue has grown by 14.08% in the last year.
- The Revenue has been growing slightly by 7.35% on average over the past years.
EPS 1Y (TTM)9.41%
EPS 3Y9.38%
EPS 5Y11.42%
EPS Q2Q%12.13%
Revenue 1Y (TTM)14.08%
Revenue growth 3Y8.79%
Revenue growth 5Y7.35%
Sales Q2Q%7.42%
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 5.74% on average over the next years.
EPS Next Y9.01%
EPS Next 2Y10.65%
EPS Next 3Y11.34%
EPS Next 5Y10.38%
Revenue Next Year9.68%
Revenue Next 2Y7.5%
Revenue Next 3Y6.84%
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.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 20.37 indicates a rather expensive valuation of AON.
- Based on the Price/Earnings ratio, AON is valued a bit more expensive than 67.79% of the companies in the same industry.
- AON is valuated rather cheaply when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
- AON is valuated rather expensively with a Price/Forward Earnings ratio of 17.59.
- 65.10% of the companies in the same industry are cheaper than AON, based on the Price/Forward Earnings ratio.
- Compared to an average S&P500 Price/Forward Earnings ratio of 24.26, AON is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.37 | ||
| Fwd PE | 17.59 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of AON is on the same level as its industry peers.
- 67.79% 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 | 23.95 | ||
| EV/EBITDA | 12.76 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- AON has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.26
PEG (5Y)1.78
EPS Next 2Y10.65%
EPS Next 3Y11.34%
5. Dividend
5.1 Amount
- AON has a yearly dividend return of 0.86%, which is pretty low.
- Compared to an average industry Dividend Yield of 2.53, AON is paying slightly less dividend.
- With a Dividend Yield of 0.86, AON pays less dividend than the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.86% |
5.2 History
- On average, the dividend of AON grows each year by 9.31%, which is quite nice.
- AON has been paying a dividend for at least 10 years, so it has a reliable track record.
- As AON did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)9.31%
Div Incr Years5
Div Non Decr Years5
5.3 Sustainability
- 22.59% of the earnings are spent on dividend by AON. This is a low number and 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.
DP22.59%
EPS Next 2Y10.65%
EPS Next 3Y11.34%
AON PLC-CLASS A / AON FAQ
Can you provide the ChartMill fundamental rating for AON PLC-CLASS A?
ChartMill assigns a fundamental rating of 5 / 10 to AON.
What is the valuation status of AON PLC-CLASS A (AON) stock?
ChartMill assigns a valuation rating of 2 / 10 to AON PLC-CLASS A (AON). This can be considered as Overvalued.
What is the profitability of AON stock?
AON PLC-CLASS A (AON) has a profitability rating of 9 / 10.
Can you provide the PE and PB ratios for AON stock?
The Price/Earnings (PE) ratio for AON PLC-CLASS A (AON) is 20.37 and the Price/Book (PB) ratio is 9.17.
What is the financial health of AON PLC-CLASS A (AON) stock?
The financial health rating of AON PLC-CLASS A (AON) is 4 / 10.