Aon (NYSE:AON) - Share price, News & Analysis

AON fundamental analysis
Snowflake Score
Valuation	0/6
Future Growth	2/6
Past Performance	1/6
Financial Health	4/6
Dividends	4/6

AON Stock Overview

Aon plc, a professional services firm, provides advice and solutions to clients focused on risk, retirement, and health worldwide.

Rewards

Earnings are forecast to grow 10.44% per year

Risk Analysis

Has a high level of debt

Large one-off items impacting financial results

Profit margins (11.1%) are lower than last year (18.6%)

Aon Competitors

Marsh & McLennan Companies

NYSE:MMC

US$76.7b

Arthur J. Gallagher

NYSE:AJG

US$33.1b

Willis Towers Watson

NasdaqGS:WTW

US$22.5b

Brown & Brown

NYSE:BRO

US$15.9b

Price History & Performance

Summary of all time highs, changes and price drops for Aon
Historical stock prices
Current Share Price	US$265.24
52 Week High	US$341.98
52 Week Low	US$223.19
Beta	0.93
1 Month Change	-17.48%
3 Month Change	-7.94%
1 Year Change	5.64%
3 Year Change	48.08%
5 Year Change	102.61%
Change since IPO	2,012.53%

Shareholder Returns

	AON	US Insurance	US Market
7D	-1.6%	0.4%	1.0%
1Y	5.6%	2.4%	-15.1%

Return vs Industry: AON exceeded the US Insurance industry which returned 2.5% over the past year.

Return vs Market: AON exceeded the US Market which returned -13.2% over the past year.

Price Volatility

Is AON's price volatile compared to industry and market?
AON volatility
AON Average Weekly Movement	4.6%
Insurance Industry Average Movement	5.1%
Market Average Movement	7.8%
10% most volatile stocks in US Market	16.8%
10% least volatile stocks in US Market	2.9%

Stable Share Price: AON is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: AON's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1919	50,000	Greg Case	https://www.aon.com

Aon plc, a professional services firm, provides advice and solutions to clients focused on risk, retirement, and health worldwide. It offers commercial risk solutions, including retail brokerage, cyber, and global risk consulting solutions, as well as acts as a captives management; and health solutions, such as health and benefits brokerages, and health care exchanges. The company also provides treaty and facultative reinsurance, as well as insurance-linked securities, capital raising, strategic advice, restructuring, and mergers and acquisitions services; and corporate finance advisory services and capital markets solutions products.

Aon Fundamentals Summary

How do Aon's earnings and revenue compare to its market cap?
AON fundamental statistics
Market Cap	US$56.33b
Earnings (TTM)	US$1.37b
Revenue (TTM)	US$12.34b

41.3x

P/E Ratio

4.6x

P/S Ratio

Is AON overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
AON income statement (TTM)
Revenue	US$12.34b
Cost of Revenue	US$6.77b
Gross Profit	US$5.56b
Other Expenses	US$4.20b
Earnings	US$1.37b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	6.43
Gross Margin	45.10%
Net Profit Margin	11.06%
Debt/Equity Ratio	796.6%

How did AON perform over the long term?

See historical performance and comparison

Dividends

0.8%

Current Dividend Yield

33%

Payout Ratio

Valuation

Is Aon undervalued compared to its fair value and its price relative to the market?

Valuation Score

0/6

Valuation Score 0/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

41.27x

Price to Earnings (PE) ratio

Share Price vs. Fair Value

Below Fair Value: AON ($265.24) is trading above our estimate of fair value ($98.61)

Significantly Below Fair Value: AON is trading above our estimate of fair value.

Price To Earnings Ratio

PE vs Industry: AON is poor value based on its Price-To-Earnings Ratio (41.3x) compared to the US Insurance industry average (11.1x).

PE vs Market: AON is poor value based on its Price-To-Earnings Ratio (41.3x) compared to the US market (14.9x).

Price to Earnings Growth Ratio

PEG Ratio: AON is poor value based on its PEG Ratio (4x)

Price to Book Ratio

PB vs Industry: AON is overvalued based on its Price-To-Book Ratio (47.9x) compared to the US Insurance industry average (1x).

Future Growth

How is Aon forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

10.4%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: AON's forecast earnings growth (10.4% per year) is above the savings rate (1.9%).

Earnings vs Market: AON's earnings (10.4% per year) are forecast to grow slower than the US market (12.1% per year).

High Growth Earnings: AON's earnings are forecast to grow, but not significantly.

Revenue vs Market: AON's revenue (5.1% per year) is forecast to grow slower than the US market (7.7% per year).

High Growth Revenue: AON's revenue (5.1% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: AON's Return on Equity is forecast to be very high in 3 years time (246.7%).

Past Performance

How has Aon performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

16.1%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: AON has a large one-off loss of $1.2B impacting its March 31 2022 financial results.

Growing Profit Margin: AON's current net profit margins (11.1%) are lower than last year (18.6%).

Past Earnings Growth Analysis

Earnings Trend: AON's earnings have grown by 16.1% per year over the past 5 years.

Accelerating Growth: AON's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: AON had negative earnings growth (-35.3%) over the past year, making it difficult to compare to the Insurance industry average (-2.6%).

Return on Equity

High ROE: Whilst AON's Return on Equity (110.22%) is outstanding, this metric is skewed due to their high level of debt.

Financial Health

How is Aon's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: AON's short term assets ($20.5B) exceed its short term liabilities ($19.2B).

Long Term Liabilities: AON's short term assets ($20.5B) exceed its long term liabilities ($13.0B).

Debt to Equity History and Analysis

Debt Level: AON's net debt to equity ratio (727.9%) is considered high.

Reducing Debt: AON's debt to equity ratio has increased from 107.7% to 796.6% over the past 5 years.

Debt Coverage: AON's debt is well covered by operating cash flow (20.3%).

Interest Coverage: AON's interest payments on its debt are well covered by EBIT (11.2x coverage).

Balance Sheet

Dividend

What is Aon current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

0.84%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: AON's dividend (0.84%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.57%).

High Dividend: AON's dividend (0.84%) is low compared to the top 25% of dividend payers in the US market (4.06%).

Stability and Growth of Payments

Stable Dividend: AON's dividends per share have been stable in the past 10 years.

Growing Dividend: AON's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (33.1%), AON's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its low cash payout ratio (24.4%), AON's dividend payments are well covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

2.8yrs

Average management tenure

CEO

Greg Case (58 yo)

17.08yrs

Tenure

US$19,868,384

Compensation

Mr. Gregory Clarence Case, also known as Greg, has been the Chief Executive Officer and Executive Director of Aon plc at Aon Hewitt LLC since April 4, 2005. Mr. Case served as the President of Aon plc sinc...

CEO Compensation Analysis

Compensation vs Market: Greg's total compensation ($USD19.87M) is above average for companies of similar size in the US market ($USD13.26M).

Compensation vs Earnings: Greg's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: AON's management team is considered experienced (2.8 years average tenure).

Board Members

Experienced Board: AON's board of directors are seasoned and experienced ( 15.7 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: AON insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/05/25 00:00
End of Day Share Price	2022/05/25 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31