AON PLC-CLASS A (AON) Stock Fundamental Analysis
NYSE:AON - New York Stock Exchange, Inc. - IE00BLP1HW54 - Common Stock - Currency: USD
AON gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 143 industry peers in the Insurance industry. While AON has a great profitability rating, 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
In the past year AON was profitable.
In the past year AON had a positive cash flow from operations.
Each year in the past 5 years AON has been profitable.
AON had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of AON (5.42%) is better than 82.27% of its industry peers.
With an excellent Return On Equity value of 43.36%, AON belongs to the best of the industry, outperforming 98.58% of the companies in the same industry.
The Return On Invested Capital of AON (13.13%) is better than 97.87% of its industry peers.
The Average Return On Invested Capital over the past 3 years for AON is significantly above the industry average of 4.59%.
The 3 year average ROIC (20.57%) for AON is well above the current ROIC(13.13%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.42% | ||
| ROE | 43.36% | ||
| ROIC | 13.13% |
ROA(3y)6.96%
ROA(5y)6.19%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)20.57%
ROIC(5y)17.9%
1.3 Margins
Looking at the Profit Margin, with a value of 16.91%, AON belongs to the top of the industry, outperforming 81.56% of the companies in the same industry.
AON's Profit Margin has improved in the last couple of years.
AON's Operating Margin of 26.91% is amongst the best of the industry. AON outperforms 90.07% of its industry peers.
AON's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 47.24%, AON belongs to the top of the industry, outperforming 94.33% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 26.91% | ||
| PM (TTM) | 16.91% | ||
| GM | 47.24% |
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.
Compared to 5 years ago, AON has less shares outstanding
Compared to 1 year ago, AON has a worse debt to assets ratio.
2.2 Solvency
AON has an Altman-Z score of 1.74. This is a bad value and indicates that AON is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.74, AON belongs to the top of the industry, outperforming 87.23% of the companies in the same industry.
AON has a debt to FCF ratio of 6.04. This is a slightly negative value and a sign of low solvency as AON would need 6.04 years to pay back of all of its debts.
AON has a worse Debt to FCF ratio (6.04) than 65.96% of its industry peers.
AON has a Debt/Equity ratio of 2.66. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of AON (2.66) is worse than 95.74% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.66 | ||
| Debt/FCF | 6.04 | ||
| Altman-Z | 1.74 |
ROIC/WACC1.96
WACC6.69%
2.3 Liquidity
A Current Ratio of 1.02 indicates that AON should not have too much problems paying its short term obligations.
AON has a better Current ratio (1.02) than 78.72% of its industry peers.
A Quick Ratio of 1.02 indicates that AON should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.02, AON is in the better half of the industry, outperforming 78.72% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.02 | ||
| Quick Ratio | 1.02 |
3. Growth
3.1 Past
AON shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.24%, 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 17.36% 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)11.24%
EPS 3Y9.38%
EPS 5Y11.42%
EPS Q2Q%13.62%
Revenue 1Y (TTM)17.36%
Revenue growth 3Y8.79%
Revenue growth 5Y7.35%
Sales Q2Q%22.87%
3.2 Future
The Earnings Per Share is expected to grow by 10.25% on average over the next years. This is quite good.
AON is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.00% yearly.
EPS Next Y10.44%
EPS Next 2Y11.46%
EPS Next 3Y11.34%
EPS Next 5Y10.25%
Revenue Next Year10.56%
Revenue Next 2Y8.34%
Revenue Next 3Y7.17%
Revenue Next 5Y6%
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.
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 24.77, the valuation of AON can be described as rather expensive.
Based on the Price/Earnings ratio, AON is valued a bit more expensive than 73.76% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 29.63, AON is valued at the same level.
Based on the Price/Forward Earnings ratio of 22.42, the valuation of AON can be described as rather expensive.
AON's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. AON is more expensive than 70.21% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of AON to the average of the S&P500 Index (22.68), we can say AON is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.77 | ||
| Fwd PE | 22.42 |
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.
Based on the Price/Free Cash Flow ratio, AON is valued a bit more expensive than 67.38% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.91 | ||
| EV/EBITDA | 20.47 |
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)2.37
PEG (5Y)2.17
EPS Next 2Y11.46%
EPS Next 3Y11.34%
5. Dividend
5.1 Amount
AON has a yearly dividend return of 0.69%, which is pretty low.
Compared to an average industry Dividend Yield of 3.09, AON is paying slightly less dividend.
Compared to an average S&P500 Dividend Yield of 2.29, AON's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.69% |
5.2 History
The dividend of AON is nicely growing with an annual growth rate of 9.29%!
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)9.29%
Div Incr Years5
Div Non Decr Years5
5.3 Sustainability
AON pays out 21.18% 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.
DP21.18%
EPS Next 2Y11.46%
EPS Next 3Y11.34%
389.56
-3.51 (-0.89%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners86.43%
Inst Owner Change-0.13%
Ins Owners1.07%
Ins Owner Change0.02%
Market Cap84.25B
Analysts68.8
Price Target396.51 (1.78%)
Short Float %2.12%
Short Ratio4.34
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.69% |
Yearly Dividend2.71
Dividend Growth(5Y)9.29%
DP21.18%
Div Incr Years5
Div Non Decr Years5
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)5.88%
Min EPS beat(2)3.03%
Max EPS beat(2)8.73%
EPS beat(4)2
Avg EPS beat(4)0.16%
Min EPS beat(4)-5.88%
Max EPS beat(4)8.73%
EPS beat(8)3
Avg EPS beat(8)-1.04%
EPS beat(12)6
Avg EPS beat(12)-0.12%
EPS beat(16)10
Avg EPS beat(16)2.26%
Revenue beat(2)0
Avg Revenue beat(2)-1.28%
Min Revenue beat(2)-2.29%
Max Revenue beat(2)-0.27%
Revenue beat(4)0
Avg Revenue beat(4)-1.29%
Min Revenue beat(4)-2.33%
Max Revenue beat(4)-0.27%
Revenue beat(8)1
Avg Revenue beat(8)-0.68%
Revenue beat(12)1
Avg Revenue beat(12)-1.32%
Revenue beat(16)4
Avg Revenue beat(16)-0.37%
PT rev (1m)0.47%
PT rev (3m)8%
EPS NQ rev (1m)-2.01%
EPS NQ rev (3m)-0.93%
EPS NY rev (1m)-1.19%
EPS NY rev (3m)-1.11%
Revenue NQ rev (1m)-1.57%
Revenue NQ rev (3m)-0.06%
Revenue NY rev (1m)-0.54%
Revenue NY rev (3m)-0.53%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.77 | ||
| Fwd PE | 22.42 | ||
| P/S | 5.37 | ||
| P/FCF | 29.91 | ||
| P/OCF | 27.76 | ||
| P/B | 13.76 | ||
| P/tB | N/A | ||
| EV/EBITDA | 20.47 |
EPS(TTM)15.73
EY4.04%
EPS(NY)17.37
Fwd EY4.46%
FCF(TTM)13.03
FCFY3.34%
OCF(TTM)14.03
OCFY3.6%
SpS72.59
BVpS28.3
TBVpS-73.15
PEG (NY)2.37
PEG (5Y)2.17
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.42% | ||
| ROE | 43.36% | ||
| ROCE | 16.26% | ||
| ROIC | 13.13% | ||
| ROICexc | 13.83% | ||
| ROICexgc | 125.21% | ||
| OM | 26.91% | ||
| PM (TTM) | 16.91% | ||
| GM | 47.24% | ||
| FCFM | 17.95% |
ROA(3y)6.96%
ROA(5y)6.19%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)20.57%
ROIC(5y)17.9%
ROICexc(3y)45.5%
ROICexc(5y)38.2%
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-18.64%
ROICexc growth 5Y-12.46%
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 Turnover0.32
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.66 | ||
| Debt/FCF | 6.04 | ||
| Debt/EBITDA | 3.31 | ||
| Cap/Depr | 31.78% | ||
| Cap/Sales | 1.39% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 61.81% | ||
| Profit Quality | 106.14% | ||
| Current Ratio | 1.02 | ||
| Quick Ratio | 1.02 | ||
| Altman-Z | 1.74 |
F-Score5
WACC6.69%
ROIC/WACC1.96
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)11.24%
EPS 3Y9.38%
EPS 5Y11.42%
EPS Q2Q%13.62%
EPS Next Y10.44%
EPS Next 2Y11.46%
EPS Next 3Y11.34%
EPS Next 5Y10.25%
Revenue 1Y (TTM)17.36%
Revenue growth 3Y8.79%
Revenue growth 5Y7.35%
Sales Q2Q%22.87%
Revenue Next Year10.56%
Revenue Next 2Y8.34%
Revenue Next 3Y7.17%
Revenue Next 5Y6%
EBIT growth 1Y7.76%
EBIT growth 3Y26.43%
EBIT growth 5Y10.02%
EBIT Next Year18.59%
EBIT Next 3Y11.27%
EBIT Next 5Y7.83%
FCF growth 1Y-11.5%
FCF growth 3Y11.27%
FCF growth 5Y11.84%
OCF growth 1Y-11.64%
OCF growth 3Y11.63%
OCF growth 5Y10.59%