AON PLC-CLASS A (AON) Stock Fundamental Analysis
NYSE:AON - IE00BLP1HW54 - Common Stock
367 USD
+0.46 (+0.13%)
366.99 USD
-0.01 (0%)
We assign a fundamental rating of 5 out of 10 to AON. AON was compared to 146 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
In the past year AON was profitable.
AON had a positive operating cash flow in the past year.
In the past 5 years AON has always been profitable.
Each year in the past 5 years AON had a positive operating cash flow.
1.2 Ratios
AON has a better Return On Assets (4.82%) than 85.62% of its industry peers.
AON's Return On Equity of 33.19% is amongst the best of the industry. AON outperforms 98.63% of its industry peers.
AON has a better Return On Invested Capital (12.28%) than 97.26% of its industry peers.
The Average Return On Invested Capital over the past 3 years for AON is significantly above the industry average of 4.46%.
The last Return On Invested Capital (12.28%) 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 | 4.82% | ||
| ROE | 33.19% | ||
| ROIC | 12.28% |
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 15.54%. This is amongst the best in the industry. AON outperforms 83.56% of its industry peers.
AON's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 26.12%, AON belongs to the best of the industry, outperforming 92.47% of the companies in the same industry.
AON's Operating Margin has improved in the last couple of years.
AON's Gross Margin of 47.00% is amongst the best of the industry. AON outperforms 94.52% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 26.12% | ||
| PM (TTM) | 15.54% | ||
| GM | 47% |
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.
Compared to 1 year ago, AON has more shares outstanding
The number of shares outstanding for AON has been reduced compared to 5 years ago.
Compared to 1 year ago, AON has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.58, we must say that AON is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of AON (1.58) is better than 87.67% of its industry peers.
The Debt to FCF ratio of AON is 5.94, which is a neutral value as it means it would take AON, 5.94 years of fcf income to pay off all of its debts.
AON has a worse Debt to FCF ratio (5.94) than 62.33% of its industry peers.
AON has a Debt/Equity ratio of 2.20. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of AON (2.20) is worse than 93.15% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.2 | ||
| Debt/FCF | 5.94 | ||
| Altman-Z | 1.58 |
ROIC/WACC1.77
WACC6.93%
2.3 Liquidity
A Current Ratio of 1.03 indicates that AON should not have too much problems paying its short term obligations.
AON has a Current ratio of 1.03. This is in the better half of the industry: AON outperforms 79.45% of its industry peers.
A Quick Ratio of 1.03 indicates that AON should not have too much problems paying its short term obligations.
AON has a Quick ratio of 1.03. This is in the better half of the industry: AON outperforms 79.45% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.03 | ||
| Quick Ratio | 1.03 |
3. Growth
3.1 Past
AON shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 10.14%, which is quite good.
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 18.32% in the last year.
AON shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.35% yearly.
EPS 1Y (TTM)10.14%
EPS 3Y9.38%
EPS 5Y11.42%
EPS Q2Q%19.11%
Revenue 1Y (TTM)18.32%
Revenue growth 3Y8.79%
Revenue growth 5Y7.35%
Sales Q2Q%10.51%
3.2 Future
Based on estimates for the next years, AON will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.38% on average per year.
AON is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.74% yearly.
EPS Next Y8.23%
EPS Next 2Y11.07%
EPS Next 3Y11.13%
EPS Next 5Y10.38%
Revenue Next Year9.78%
Revenue Next 2Y8.32%
Revenue Next 3Y7.44%
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
AON is valuated rather expensively with a Price/Earnings ratio of 22.52.
Compared to the rest of the industry, the Price/Earnings ratio of AON indicates a slightly more expensive valuation: AON is more expensive than 71.23% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.13, AON is valued at the same level.
AON is valuated rather expensively with a Price/Forward Earnings ratio of 18.91.
Compared to the rest of the industry, the Price/Forward Earnings ratio of AON indicates a slightly more expensive valuation: AON is more expensive than 68.49% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.76. AON is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.52 | ||
| Fwd PE | 18.91 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as AON.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of AON indicates a slightly more expensive valuation: AON is more expensive than 65.07% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.18 | ||
| EV/EBITDA | 14.32 |
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)2.73
PEG (5Y)1.97
EPS Next 2Y11.07%
EPS Next 3Y11.13%
5. Dividend
5.1 Amount
With a yearly dividend of 0.81%, AON is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.24, AON is paying slightly less dividend.
With a Dividend Yield of 0.81, AON pays less dividend than the S&P500 average, which is at 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.81% |
5.2 History
The dividend of AON is nicely growing with an annual growth rate of 9.31%!
AON has paid a dividend for at least 10 years, which is 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
AON pays out 23.09% 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.
DP23.09%
EPS Next 2Y11.07%
EPS Next 3Y11.13%
367
+0.46 (+0.13%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners90.32%
Inst Owner Change-1.15%
Ins Owners1.09%
Ins Owner Change0.23%
Market Cap79.14B
Analysts72
Price Target418.21 (13.95%)
Short Float %1.44%
Short Ratio2.13
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.81% |
Yearly Dividend2.71
Dividend Growth(5Y)9.31%
DP23.09%
Div Incr Years5
Div Non Decr Years5
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-2.6%
Min EPS beat(2)-6.82%
Max EPS beat(2)1.62%
EPS beat(4)3
Avg EPS beat(4)1.64%
Min EPS beat(4)-6.82%
Max EPS beat(4)8.73%
EPS beat(8)4
Avg EPS beat(8)-0.75%
EPS beat(12)6
Avg EPS beat(12)-0.66%
EPS beat(16)9
Avg EPS beat(16)0.26%
Revenue beat(2)0
Avg Revenue beat(2)-2.44%
Min Revenue beat(2)-3.71%
Max Revenue beat(2)-1.17%
Revenue beat(4)0
Avg Revenue beat(4)-1.86%
Min Revenue beat(4)-3.71%
Max Revenue beat(4)-0.27%
Revenue beat(8)1
Avg Revenue beat(8)-1.15%
Revenue beat(12)1
Avg Revenue beat(12)-1.37%
Revenue beat(16)2
Avg Revenue beat(16)-1.31%
PT rev (1m)2.82%
PT rev (3m)2.66%
EPS NQ rev (1m)-0.35%
EPS NQ rev (3m)-0.3%
EPS NY rev (1m)0%
EPS NY rev (3m)0.05%
Revenue NQ rev (1m)0.05%
Revenue NQ rev (3m)0.55%
Revenue NY rev (1m)0.2%
Revenue NY rev (3m)0.19%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.52 | ||
| Fwd PE | 18.91 | ||
| P/S | 4.72 | ||
| P/FCF | 27.18 | ||
| P/OCF | 25.13 | ||
| P/B | 10.09 | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.32 |
EPS(TTM)16.3
EY4.44%
EPS(NY)19.41
Fwd EY5.29%
FCF(TTM)13.5
FCFY3.68%
OCF(TTM)14.6
OCFY3.98%
SpS77.69
BVpS36.37
TBVpS-69.16
PEG (NY)2.73
PEG (5Y)1.97
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.82% | ||
| ROE | 33.19% | ||
| ROCE | 16.25% | ||
| ROIC | 12.28% | ||
| ROICexc | 18.53% | ||
| ROICexgc | N/A | ||
| OM | 26.12% | ||
| PM (TTM) | 15.54% | ||
| GM | 47% | ||
| FCFM | 17.38% |
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-Score6
Asset Turnover0.31
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.2 | ||
| Debt/FCF | 5.94 | ||
| Debt/EBITDA | 3.25 | ||
| Cap/Depr | 25.05% | ||
| Cap/Sales | 1.41% | ||
| Interest Coverage | 5.35 | ||
| Cash Conversion | 59.17% | ||
| Profit Quality | 111.87% | ||
| Current Ratio | 1.03 | ||
| Quick Ratio | 1.03 | ||
| Altman-Z | 1.58 |
F-Score6
WACC6.93%
ROIC/WACC1.77
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)10.14%
EPS 3Y9.38%
EPS 5Y11.42%
EPS Q2Q%19.11%
EPS Next Y8.23%
EPS Next 2Y11.07%
EPS Next 3Y11.13%
EPS Next 5Y10.38%
Revenue 1Y (TTM)18.32%
Revenue growth 3Y8.79%
Revenue growth 5Y7.35%
Sales Q2Q%10.51%
Revenue Next Year9.78%
Revenue Next 2Y8.32%
Revenue Next 3Y7.44%
Revenue Next 5Y5.74%
EBIT growth 1Y4.84%
EBIT growth 3Y26.43%
EBIT growth 5Y10.02%
EBIT Next Year19.23%
EBIT Next 3Y12.05%
EBIT Next 5Y7.11%
FCF growth 1Y-1.15%
FCF growth 3Y11.27%
FCF growth 5Y11.84%
OCF growth 1Y-2.17%
OCF growth 3Y11.63%
OCF growth 5Y10.59%