AON : NYSE : Financial
$112.40 up 0.77 | 0.69%
Today's Range: 111.31 - 112.95
Avg. Daily Volume: 864,300
09/27/16 - 3:59 PM ET

Financial Analysis


AON PLC's gross profit margin for the second quarter of its fiscal year 2016 has decreased when compared to the same period a year ago. Even though sales decreased, the net income has increased, representing an increase to the bottom line. AON PLC has very weak liquidity. Currently, the Quick Ratio is 0.26 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

During the same period, stockholders' equity ("net worth") has decreased by 14.05% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)2766.02805.0
EBITDA ($mil)531.0589.0
EBIT ($mil)405.0453.0
Net Income ($mil)272.0178.0


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)689.0851.0
Total Assets ($mil)26693.029203.0
Total Debt ($mil)6158.06061.0
Equity ($mil)5499.06398.0


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin19.221.0
EBITDA Margin19.1920.99
Operating Margin14.6416.15
Sales Turnover0.430.41
Return on Assets5.494.36
Return on Equity26.6519.91
Debt Q2 FY16 Q2 FY15
Current Ratio1.091.06
Debt/Capital0.530.49
Interest Expense73.068.0
Interest Coverage5.556.66


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)265.8279.8
Div / share0.330.3
EPS1.010.62
Book value / share20.6922.87
Institutional Own % n/a n/a
Avg Daily Volume926351.01177974.0

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 42.44 for the Insurance industry and a discount compared to the S&P 500 average of 25.19. For additional comparison, its price-to-book ratio of 5.48 indicates a significant premium versus the S&P 500 average of 2.82 and a significant premium versus the industry average of 1.57. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
AON 21.43 Peers 42.44   AON 12.57 Peers 11.90

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

AON is trading at a significant discount to its peers.

 

Average. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

AON is trading at a valuation on par to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
AON 15.71 Peers 14.88   AON 0.63 Peers 2.00

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

AON is trading at a premium to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

AON trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
AON 5.48 Peers 1.57   AON 21.33 Peers -5.86

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

AON is trading at a significant premium to its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

AON is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
AON 2.60 Peers 1.41   AON -2.06 Peers 4.35

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

AON is trading at a significant premium to its industry.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

AON significantly trails its peers on the basis of sales growth

 

 

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