AON : NYSE : Financial
$110.56 | %
Today's Range: 109.52 - 110.59
Avg. Daily Volume: 1,148,900
07/22/16 - 4:02 PM ET

Financial Analysis


AON PLC's gross profit margin for the first quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Sales and net income have dropped, however the growth has outpaced the average competitor within the industry. AON PLC has very weak liquidity. Currently, the Quick Ratio is 0.29 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 17.03% 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 Q1 FY16 Q1 FY15
Net Sales ($mil)2792.02847.0
EBITDA ($mil)573.0577.0
EBIT ($mil)450.0441.0
Net Income ($mil)315.0328.0


Balance Sheet Q1 FY16 Q1 FY15
Cash & Equiv. ($mil)1052.0721.0
Total Assets ($mil)26813.028389.0
Total Debt ($mil)6597.05676.0
Equity ($mil)5281.06365.0


Profitability Q1 FY16 Q1 FY15
Gross Profit Margin20.5220.27
EBITDA Margin20.5220.26
Operating Margin16.1215.49
Sales Turnover0.430.42
Return on Assets5.114.93
Return on Equity25.9721.99
Debt Q1 FY16 Q1 FY15
Current Ratio1.11.06
Debt/Capital0.560.47
Interest Expense69.065.0
Interest Coverage6.526.78


Share Data Q1 FY16 Q1 FY15
Shares outstanding (mil)264.8281.7
Div / share0.30.25
EPS1.151.14
Book value / share19.9422.6
Institutional Own % n/a n/a
Avg Daily Volume1158774.01465596.0

Valuation


BUY. This stock's P/E ratio indicates a premium compared to an average of 16.47 for the Insurance industry and a discount compared to the S&P 500 average of 25.03. For additional comparison, its price-to-book ratio of 5.54 indicates a significant premium versus the S&P 500 average of 2.80 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. Upon assessment of these and other key valuation criteria, AON PLC proves to trade at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
AON 22.56 Peers 16.47   AON 13.83 Peers 12.84

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

AON is trading at a significant premium 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 15.20 Peers 15.93   AON 0.66 Peers 1.72

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

AON is trading at a valuation on par with 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 5.54 Peers 1.57   AON 3.15 Peers 40.14

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.

 

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

However, AON is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
AON 2.52 Peers 1.47   AON -2.67 Peers -2.92

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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