AON PLC-CLASS A (AON) Stock Fundamental Analysis
NYSE:AON - New York Stock Exchange, Inc. - IE00BLP1HW54 - Common Stock
Overall AON gets a fundamental rating of 6 out of 10. We evaluated AON against 144 industry peers in the Insurance industry. AON scores excellent on profitability, 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.
In the past year AON had a positive cash flow from operations.
In the past 5 years AON has always been profitable.
In the past 5 years AON always reported a positive cash flow from operatings.
1.2 Ratios
AON's Return On Assets of 4.88% is fine compared to the rest of the industry. AON outperforms 77.46% of its industry peers.
AON has a Return On Equity of 39.01%. This is amongst the best in the industry. AON outperforms 97.18% of its industry peers.
AON's Return On Invested Capital of 11.92% is amongst the best of the industry. AON outperforms 95.77% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for AON is significantly above the industry average of 4.61%.
The last Return On Invested Capital (11.92%) for AON is well below the 3 year average (21.02%), which needs to be investigated, but indicates that AON had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.88% | ||
| ROE | 39.01% | ||
| ROIC | 11.92% |
ROA(3y)6.47%
ROA(5y)6.15%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)21.02%
ROIC(5y)18.9%
1.3 Margins
AON has a Profit Margin of 16.32%. This is in the better half of the industry: AON outperforms 78.17% of its industry peers.
AON's Profit Margin has improved in the last couple of years.
AON's Operating Margin of 26.61% is amongst the best of the industry. AON outperforms 89.44% of its industry peers.
In the last couple of years the Operating Margin of AON has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 26.61% | ||
| PM (TTM) | 16.32% | ||
| GM | N/A |
OM growth 3Y6.99%
OM growth 5Y8.5%
PM growth 3Y2.51%
PM growth 5Y12.73%
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 less shares outstanding than it did 1 year ago.
AON has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, AON has about the same debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.62, we must say that AON is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.62, AON belongs to the top of the industry, outperforming 86.62% of the companies in the same industry.
The Debt to FCF ratio of AON is 5.93, which is a neutral value as it means it would take AON, 5.93 years of fcf income to pay off all of its debts.
AON's Debt to FCF ratio of 5.93 is on the low side compared to the rest of the industry. AON is outperformed by 65.49% of its industry peers.
A Debt/Equity ratio of 2.74 is on the high side and indicates that AON has dependencies on debt financing.
The Debt to Equity ratio of AON (2.74) is worse than 95.77% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.74 | ||
| Debt/FCF | 5.93 | ||
| Altman-Z | 1.62 |
ROIC/WACC1.76
WACC6.79%
2.3 Liquidity
A Current Ratio of 1.07 indicates that AON should not have too much problems paying its short term obligations.
AON has a better Current ratio (1.07) than 78.87% of its industry peers.
A Quick Ratio of 1.07 indicates that AON should not have too much problems paying its short term obligations.
With a decent Quick ratio value of 1.07, AON is doing good in the industry, outperforming 78.87% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.07 | ||
| Quick Ratio | 1.07 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 7.50% over the past year.
The Earnings Per Share has been growing by 11.68% on average over the past years. This is quite good.
The Revenue has grown by 13.67% in the past year. This is quite good.
The Revenue has been growing slightly by 4.43% on average over the past years.
EPS 1Y (TTM)7.5%
EPS 3Y13.04%
EPS 5Y11.68%
EPS Q2Q%17.24%
Revenue 1Y (TTM)13.67%
Revenue growth 3Y6.52%
Revenue growth 5Y4.43%
Sales Q2Q%26.01%
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 10.45% on average per year.
AON is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.29% yearly.
EPS Next Y10.37%
EPS Next 2Y11.51%
EPS Next 3Y11.98%
EPS Next 5Y10.45%
Revenue Next Year18%
Revenue Next 2Y14.51%
Revenue Next 3Y11.67%
Revenue Next 5Y8.29%
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 accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
AON is valuated rather expensively with a Price/Earnings ratio of 24.09.
71.83% of the companies in the same industry are cheaper than AON, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of AON to the average of the S&P500 Index (27.96), we can say AON is valued inline with the index average.
A Price/Forward Earnings ratio of 20.83 indicates a rather expensive valuation of AON.
70.42% of the companies in the same industry are cheaper than AON, based on the Price/Forward Earnings ratio.
AON's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 24.11.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.09 | ||
| Fwd PE | 20.83 |
4.2 Price Multiples
AON's Enterprise Value to EBITDA is on the same level as the industry average.
AON's Price/Free Cash Flow ratio is a bit more expensive when compared to the industry. AON is more expensive than 66.90% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.46 | ||
| EV/EBITDA | 17.66 |
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)2.32
PEG (5Y)2.06
EPS Next 2Y11.51%
EPS Next 3Y11.98%
5. Dividend
5.1 Amount
With a yearly dividend of 0.73%, AON is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.13, AON is paying slightly less dividend.
With a Dividend Yield of 0.73, AON pays less dividend than the S&P500 average, which is at 2.33.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.73% |
5.2 History
On average, the dividend of AON grows each year by 9.13%, 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)9.13%
Div Incr Years5
Div Non Decr Years5
5.3 Sustainability
22.13% of the earnings are spent on dividend by AON. This is a low number and 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.
DP22.13%
EPS Next 2Y11.51%
EPS Next 3Y11.98%
AON PLC-CLASS A
NYSE:AON (1/17/2025, 8:04:00 PM)
After market: 366.17 0 (0%)366.17
-1.94 (-0.53%)
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 Change-0.38%
Market Cap79.19B
Analysts67.2
Price Target394.65 (7.78%)
Short Float %2.18%
Short Ratio4.49
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.73% |
Yearly Dividend2.42
Dividend Growth(5Y)9.13%
DP22.13%
Div Incr Years5
Div Non Decr Years5
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.42%
Min EPS beat(2)-5.88%
Max EPS beat(2)8.73%
EPS beat(4)1
Avg EPS beat(4)-1.91%
Min EPS beat(4)-5.88%
Max EPS beat(4)8.73%
EPS beat(8)3
Avg EPS beat(8)-0.75%
EPS beat(12)6
Avg EPS beat(12)0.43%
EPS beat(16)10
Avg EPS beat(16)2.42%
Revenue beat(2)0
Avg Revenue beat(2)-0.27%
Min Revenue beat(2)-0.27%
Max Revenue beat(2)-0.27%
Revenue beat(4)0
Avg Revenue beat(4)-0.83%
Min Revenue beat(4)-2.33%
Max Revenue beat(4)-0.27%
Revenue beat(8)1
Avg Revenue beat(8)-0.54%
Revenue beat(12)1
Avg Revenue beat(12)-1.39%
Revenue beat(16)5
Avg Revenue beat(16)-0.02%
PT rev (1m)-1.16%
PT rev (3m)11.6%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.28%
EPS NY rev (1m)-0.02%
EPS NY rev (3m)1.37%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.76%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)0.26%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.09 | ||
| Fwd PE | 20.83 | ||
| P/S | 5.31 | ||
| P/FCF | 27.46 | ||
| P/OCF | 25.58 | ||
| P/B | 12.68 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.66 |
EPS(TTM)15.2
EY4.15%
EPS(NY)17.58
Fwd EY4.8%
FCF(TTM)13.34
FCFY3.64%
OCF(TTM)14.32
OCFY3.91%
SpS69.02
BVpS28.87
TBVpS-74.71
PEG (NY)2.32
PEG (5Y)2.06
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.88% | ||
| ROE | 39.01% | ||
| ROCE | 14.29% | ||
| ROIC | 11.92% | ||
| ROICexc | 17.86% | ||
| ROICexgc | N/A | ||
| OM | 26.61% | ||
| PM (TTM) | 16.32% | ||
| GM | N/A | ||
| FCFM | 19.32% |
ROA(3y)6.47%
ROA(5y)6.15%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)21.02%
ROIC(5y)18.9%
ROICexc(3y)51.07%
ROICexc(5y)42.14%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)26.44%
ROCE(5y)23.44%
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3Y33.47%
ROICexc growth 5Y27.16%
OM growth 3Y6.99%
OM growth 5Y8.5%
PM growth 3Y2.51%
PM growth 5Y12.73%
GM growth 3YN/A
GM growth 5YN/A
F-Score5
Asset Turnover0.3
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.74 | ||
| Debt/FCF | 5.93 | ||
| Debt/EBITDA | 3.8 | ||
| Cap/Depr | 40.69% | ||
| Cap/Sales | 1.42% | ||
| Interest Coverage | 5.88 | ||
| Cash Conversion | 68.91% | ||
| Profit Quality | 118.39% | ||
| Current Ratio | 1.07 | ||
| Quick Ratio | 1.07 | ||
| Altman-Z | 1.62 |
F-Score5
WACC6.79%
ROIC/WACC1.76
Cap/Depr(3y)71.57%
Cap/Depr(5y)57.75%
Cap/Sales(3y)1.53%
Cap/Sales(5y)1.58%
Profit Quality(3y)134.62%
Profit Quality(5y)128.63%
High Growth Momentum
Growth
EPS 1Y (TTM)7.5%
EPS 3Y13.04%
EPS 5Y11.68%
EPS Q2Q%17.24%
EPS Next Y10.37%
EPS Next 2Y11.51%
EPS Next 3Y11.98%
EPS Next 5Y10.45%
Revenue 1Y (TTM)13.67%
Revenue growth 3Y6.52%
Revenue growth 5Y4.43%
Sales Q2Q%26.01%
Revenue Next Year18%
Revenue Next 2Y14.51%
Revenue Next 3Y11.67%
Revenue Next 5Y8.29%
EBIT growth 1Y-1.29%
EBIT growth 3Y13.97%
EBIT growth 5Y13.3%
EBIT Next Year21.51%
EBIT Next 3Y14.5%
EBIT Next 5Y9.43%
FCF growth 1Y-2.14%
FCF growth 3Y6.41%
FCF growth 5Y17.09%
OCF growth 1Y-0.39%
OCF growth 3Y7.27%
OCF growth 5Y15.3%