NYSE:AON

Stock Analysis Report

Executive Summary

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

Rewards

Trading at 12.2% below its fair value

Earnings are forecast to grow 20.51% per year

Earnings grew by 44.6% over the past year

Risk Analysis

No risks detected for AON from our risk checks.


Snowflake Analysis

Proven track record with reasonable growth potential.


Similar Companies

Share Price & News

How has Aon's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: AON has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.8%

AON

-1.5%

US Insurance

-1.1%

US Market


1 Year Return

34.6%

AON

16.3%

US Insurance

17.9%

US Market

Return vs Industry: AON exceeded the US Insurance industry which returned 16.3% over the past year.

Return vs Market: AON exceeded the US Market which returned 17.9% over the past year.


Shareholder returns

AONIndustryMarket
7 Day-1.8%-1.5%-1.1%
30 Day8.5%3.0%1.4%
90 Day15.5%5.2%6.9%
1 Year35.8%34.6%19.1%16.3%20.3%17.9%
3 Year104.8%98.6%34.4%24.0%47.8%38.3%
5 Year143.8%130.7%72.0%51.3%71.9%53.0%

Price Volatility Vs. Market

How volatile is Aon's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

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

12.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: AON ($231.51) is trading below our estimate of fair value ($263.62)

Significantly Below Fair Value: AON is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: AON is poor value based on its PE Ratio (36x) compared to the Insurance industry average (13.4x).

PE vs Market: AON is poor value based on its PE Ratio (36x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: AON is poor value based on its PEG Ratio (1.8x)


Price to Book Ratio

PB vs Industry: AON is overvalued based on its PB Ratio (15.9x) compared to the US Insurance industry average (1.1x).


Next Steps

Future Growth

How is Aon forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?

20.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AON's forecast earnings growth (20.5% per year) is above the savings rate (1.7%).

Earnings vs Market: AON's earnings (20.5% per year) are forecast to grow faster than the US market (14.1% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: AON's revenue (5.5% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: AON's revenue (5.5% 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 (79.4%).


Next Steps

Past Performance

How has Aon performed over the past 5 years?

-4.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: AON has high quality earnings.

Growing Profit Margin: AON's current net profit margins (13.9%) are higher than last year (9.8%).


Past Earnings Growth Analysis

Earnings Trend: AON's earnings have declined by -4% per year over the past 5 years.

Accelerating Growth: AON's earnings growth over the past year (44.6%) exceeds its 5-year average (-4% per year).

Earnings vs Industry: AON earnings growth over the past year (44.6%) exceeded the Insurance industry 32.1%.


Return on Equity

High ROE: Whilst AON's Return on Equity (45.64%) is outstanding, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Aon's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: AON has a low level of unsold assets or inventory.

Debt Coverage by Assets: AON's debt is covered by short term assets (assets are 2.2x debt).


Financial Institutions Analysis

Asset Level: AON's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if AON has a sufficient allowance for bad loans.

Low Risk Liabilities: AON reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if AON has an acceptable proportion of non-loan assets held.

Low Risk Deposits: AON has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if AON has an appropriate level of bad loans.


Next Steps

Dividend

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

0.76%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: AON's dividend (0.76%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.45%).

High Dividend: AON's dividend (0.76%) is low compared to the top 25% of dividend payers in the US market (3.73%).


Stability and Growth of Payments

Stable Dividend: AON is not paying a notable dividend for the US market, therefore no need to check if payments are stable.

Growing Dividend: AON is not paying a notable dividend for the US market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: AON is not paying a notable dividend for the US market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of AON's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

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

2.3yrs

Average management tenure


CEO

Greg Case (56yo)

14.8yrs

Tenure

US$16,163,875

Compensation

Mr. Gregory C. Case, also known as Greg, has been the Chief Executive Officer and Executive Director of Aon plc and Aon Corporation at Aon Hewitt LLC since April 4, 2005. He serves as Chief Executive Offic ...


CEO Compensation Analysis

Compensation vs Market: Greg's total compensation ($USD16.16M) is above average for companies of similar size in the US market ($USD10.81M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Gregory Case
CEO & Executive Director14.8yrsUS$16.16m0.52% $279.4m
Eric Andersen
Co-President1.8yrsUS$4.54m0.045% $24.1m
Michael O'Connor
Co-President1.8yrsUS$4.50m0.053% $28.7m
Christa Davies
Executive VP of Global Finance & CFO11.9yrsUS$12.32m0.095% $50.8m
John Bruno
Global COO and CEO of Data & Analytic Services2.8yrsno data0.030% $15.9m
Michael Neller
Chief Accounting Officer0yrsno data0.0023% $1.2m
Frances Sigurani
Chief Administrative Officer0yrsno datano data
Leslie Follmer
Senior VP & Head of Investor Relations0.4yrsno datano data
Darren Zeidel
Executive VP0.6yrsno data0.0037% $2.0m
Kenneth Bond
Senior Vice President of Corporate Development11.8yrsno datano data

2.3yrs

Average Tenure

50yo

Average Age

Experienced Management: AON's management team is considered experienced (2.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Gregory Case
CEO & Executive Director14.8yrsUS$16.16m0.52% $279.4m
Carlo Clavarino
Chairman & Head of M&A of EMEA Commercial Risk Solutions and CEO of MENA Commercial Risk Solutions0.8yrsno datano data
Hristo Borissov
Chairman of Czech Republic & Slovakia and CEO of Czech Republic & Slovakia7.3yrsno datano data
Richard Notebaert
Independent Non-Executive Director21.8yrsUS$397.65k0.020% $11.0m
Lester Knight
Independent Non-Executive Chairman of the Board11.5yrsUS$803.26k0.094% $50.3m
J. Losh
Independent Non-Executive Director17.1yrsUS$372.71k0.015% $8.0m
Grahame Chilton
Chairman of Aon Specialty and Director of Aon Benfield11.2yrsno datano data
Gloria Santona
Independent Non-Executive Director15.8yrsUS$387.45k0.015% $8.2m
Dominic Christian
Global Chairman of Reinsurance Solutions1.9yrsno datano data
Richard Jones
Executive Chairman of Reinsurance Solutions Business0.8yrsno datano data

11.3yrs

Average Tenure

61yo

Average Age

Experienced Board: AON's board of directors are seasoned and experienced ( 11.3 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: AON insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

Company Information

Aon plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Aon plc
  • Ticker: AON
  • Exchange: NYSE
  • Founded: 1919
  • Industry: Insurance Brokers
  • Sector: Insurance
  • Market Cap: US$53.614b
  • Shares outstanding: 231.58m
  • Website: https://www.aon.com

Number of Employees


Location

  • Aon plc
  • The Leadenhall Building
  • The Aon Centre
  • London
  • Greater London
  • EC3V 4AN
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
AONNYSE (New York Stock Exchange)YesClass A Ordinary SharesUSUSDJun 1980
9H6DB (Deutsche Boerse AG)YesClass A Ordinary SharesDEEURJun 1980
0XHLLSE (London Stock Exchange)YesClass A Ordinary SharesGBUSDJun 1980
A1ON34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 4 REPR 1 COMBRBRLJan 2020

Biography

Aon plc, a professional services firm, provides advisory and solutions based on risk, retirement, and health to clients worldwide. It offers commercial risk solutions, including retail brokerage, cyber, and global risk consulting solutions, as well as acts as a captive insurance provider; and health solutions, such as health and benefits brokerages, and health care exchanges. The company also provides reinsurance solutions, such as treaty and facultative reinsurance, as well as investment banking services, including mergers and acquisition, capital raising, strategic advisory, restructuring, and recapitalization services; insurance-linked securities; and corporate finance advisory services, capital markets solutions, and risk management products. In addition, it develops, markets, and administers customized insurance programs and specialty market solutions for organizations, and their members or affiliates; operates the Global Risk Insight Platform, which provides data, analytics, engagement, and consulting services; and offers ReView that provides advisory, analysis, and benchmarking services to help reinsurers. The company serves individuals, mid-market companies, and large global companies. Aon plc was founded in 1919 and is headquartered in London, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/23 00:26
End of Day Share Price2020/02/21 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.