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 145 industry peers in the Insurance industry. While AON belongs to the best of the industry regarding profitability, there are 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.
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 has a Return On Assets of 5.07%. This is amongst the best in the industry. AON outperforms 88.28% of its industry peers.
AON has a Return On Equity of 36.38%. This is amongst the best in the industry. AON outperforms 98.62% of its industry peers.
Looking at the Return On Invested Capital, with a value of 12.01%, AON belongs to the top of the industry, outperforming 97.93% 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 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 has a Profit Margin of 15.58%. This is amongst the best in the industry. AON outperforms 82.76% of its industry peers.
In the last couple of years the Profit Margin of AON has grown nicely.
Looking at the Operating Margin, with a value of 25.74%, AON belongs to the top of the industry, outperforming 92.41% of the companies in the same industry.
AON's Operating Margin has improved in the last couple of years.
The Gross Margin of AON (47.12%) is better 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.
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.
The debt/assets ratio for AON is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 1.66, we must say that AON is in the distress zone and has some risk of bankruptcy.
With an excellent Altman-Z score value of 1.66, 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.
The Debt to FCF ratio of AON (6.68) is worse than 67.59% of its industry peers.
A Debt/Equity ratio of 2.52 is on the high side and indicates that AON has dependencies on debt 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 | 1.66 |
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.
With a decent Quick ratio value of 1.05, AON is doing good in the industry, outperforming 80.00% of the companies in the same industry.
| 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.
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.
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.
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 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
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
AON is valuated rather expensively with a Price/Earnings ratio of 22.39.
Based on the Price/Earnings ratio, AON is valued a bit more expensive than 67.59% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.19, AON is valued at the same level.
AON is valuated rather expensively with a Price/Forward Earnings ratio of 18.28.
Based on the Price/Forward Earnings ratio, AON is valued a bit more expensive than the industry average as 69.66% of the companies are valued more cheaply.
When comparing the Price/Forward Earnings ratio of AON to the average of the S&P500 Index (35.33), we can say AON is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.39 | ||
| Fwd PE | 18.28 |
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.
AON's Price/Free Cash Flow ratio is a bit more expensive when compared to the industry. AON is more expensive than 70.34% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.82 | ||
| EV/EBITDA | 15.65 |
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)2.72
PEG (5Y)1.96
EPS Next 2Y10.7%
EPS Next 3Y10.69%
5. Dividend
5.1 Amount
AON has a yearly dividend return of 0.83%, which is pretty low.
Compared to an average industry Dividend Yield of 3.76, AON is paying slightly less dividend.
Compared to an average S&P500 Dividend Yield of 2.35, AON's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.83% |
5.2 History
The dividend of AON is nicely growing with an annual growth rate of 9.31%!
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
AON pays out 23.00% of its income as dividend. This is a sustainable payout ratio.
AON's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP23%
EPS Next 2Y10.7%
EPS Next 3Y10.69%
352.38
-7.44 (-2.07%)
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 Cap76.09B
Analysts70
Price Target406.78 (15.44%)
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 | 22.39 | ||
| Fwd PE | 18.28 | ||
| P/S | 4.65 | ||
| P/FCF | 28.82 | ||
| P/OCF | 26.55 | ||
| P/B | 10.86 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.65 |
EPS(TTM)15.74
EY4.47%
EPS(NY)19.28
Fwd EY5.47%
FCF(TTM)12.23
FCFY3.47%
OCF(TTM)13.27
OCFY3.77%
SpS75.75
BVpS32.43
TBVpS-72.05
PEG (NY)2.72
PEG (5Y)1.96
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 | 1.66 |
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%