AON PLC-CLASS A (AON) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:AON - IE00BLP1HW54 - Common Stock
342.95 USD
+9.95 (+2.99%)
342.95 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to AON. AON was compared to 148 industry peers in the Insurance industry. AON has an excellent profitability rating, but there are some minor concerns on its financial health. While showing a medium growth rate, AON is valued expensive at the moment.
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.
- In the past 5 years AON always reported a positive cash flow from operatings.
1.2 Ratios
- Looking at the Return On Assets, with a value of 5.26%, AON belongs to the top of the industry, outperforming 85.81% of the companies in the same industry.
- The Return On Equity of AON (34.24%) is better than 98.65% of its industry peers.
- With an excellent Return On Invested Capital value of 13.63%, AON belongs to the best of the industry, outperforming 97.30% 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 14.94%.
- 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
- Looking at the Profit Margin, with a value of 15.96%, AON belongs to the top of the industry, outperforming 81.76% of the companies in the same industry.
- In the last couple of years the Profit Margin of AON has grown nicely.
- AON's Operating Margin of 26.70% is amongst the best of the industry. AON outperforms 87.84% of its industry peers.
- AON's Operating Margin has improved in the last couple of years.
- AON has a Gross Margin of 47.22%. This is amongst the best in the industry. AON outperforms 93.92% of its industry peers.
| 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.
- AON has more shares outstanding than it did 1 year ago.
- Compared to 5 years ago, AON has less shares outstanding
- AON has a worse debt/assets ratio than last year.
2.2 Solvency
- Based on the Altman-Z score of 1.60, we must say that AON is in the distress zone and has some risk of bankruptcy.
- AON has a Altman-Z score of 1.60. This is amongst the best in the industry. AON outperforms 86.49% of its industry peers.
- The Debt to FCF ratio of AON is 5.52, which is a neutral value as it means it would take AON, 5.52 years of fcf income to pay off all of its debts.
- AON has a Debt to FCF ratio of 5.52. This is in the lower half of the industry: AON underperforms 64.19% of its industry peers.
- A Debt/Equity ratio of 1.95 is on the high side and indicates that AON has dependencies on debt financing.
- With a Debt to Equity ratio value of 1.95, AON is not doing good in the industry: 91.89% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.95 | ||
| Debt/FCF | 5.52 | ||
| Altman-Z | 1.6 |
ROIC/WACC1.94
WACC7.03%
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.
- With an excellent Current ratio value of 1.06, AON belongs to the best of the industry, outperforming 80.41% of the companies in the same industry.
- 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 80.41% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.06 | ||
| Quick Ratio | 1.06 |
3. Growth
3.1 Past
- AON shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 9.41%, which is quite good.
- Measured over the past years, AON shows a quite strong growth in Earnings Per Share. The EPS has been growing by 11.42% on average per year.
- Looking at the last year, AON shows a quite strong growth in Revenue. The Revenue has grown by 14.08% in the last year.
- 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)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
- 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.
- Based on estimates for the next years, AON will show a small growth in Revenue. The Revenue will grow by 5.74% on average per year.
EPS Next Y8.91%
EPS Next 2Y10.54%
EPS Next 3Y11.24%
EPS Next 5Y10.38%
Revenue Next Year9.68%
Revenue Next 2Y7.5%
Revenue Next 3Y6.83%
Revenue Next 5Y5.74%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
- 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
- With a Price/Earnings ratio of 20.62, AON is valued on the expensive side.
- Based on the Price/Earnings ratio, AON is valued a bit more expensive than the industry average as 68.24% of the companies are valued more cheaply.
- AON is valuated rather cheaply when we compare the Price/Earnings ratio to 28.39, which is the current average of the S&P500 Index.
- AON is valuated rather expensively with a Price/Forward Earnings ratio of 17.84.
- 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 65.54% of the companies listed in the same industry.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.72, AON is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.62 | ||
| Fwd PE | 17.84 |
4.2 Price Multiples
- AON's Enterprise Value to EBITDA is on the same level as the industry average.
- Based on the Price/Free Cash Flow ratio, AON is valued a bit more expensive than 67.57% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.25 | ||
| EV/EBITDA | 12.64 |
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.
- The excellent profitability rating of AON may justify a higher PE ratio.
PEG (NY)2.31
PEG (5Y)1.81
EPS Next 2Y10.54%
EPS Next 3Y11.24%
5. Dividend
5.1 Amount
- AON has a yearly dividend return of 0.89%, which is pretty low.
- AON's Dividend Yield is slightly below the industry average, which is at 2.41.
- Compared to an average S&P500 Dividend Yield of 1.82, AON's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.89% |
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.
- 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 2Y10.54%
EPS Next 3Y11.24%
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 20.62 and the Price/Book (PB) ratio is 9.29.
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.