Aon plc (NYSE: AON)

Sector: Financial Services Industry: Insurance Brokers CIK: 0000315293
Market Cap 70.39 Bn
P/B 7.53
P/E 19.05
P/S 4.10
ROIC (Qtr) 13.22
Div Yield % 0.46
Rev 1y % (Qtr) 3.69
Total Debt (Qtr) 15.89 Bn
Debt/Equity (Qtr) 1.70
Add ratio to table...

About

Aon plc, a prominent player in the global professional services industry, operates under the unified segment of Aon United. This segment comprises four solution lines: Commercial Risk, Reinsurance, Health, and Wealth. Aon's offerings include retail brokerage, specialty solutions, global risk consulting and captives management, and affinity programs. The company's operations span various industries and geographies, providing a broad range of risk and human capital solutions. Aon's Commercial Risk Solutions offer clients risk advice and solutions...

Read more

Investment thesis

Bull case

  • Healthy cash reserves of 1.20B provide 2.03x coverage of short-term debt 589M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 3.48B provides exceptional 63.29x coverage of minority interest expenses 55M, showing strong core operations.
  • Robust free cash flow of 3.22B exceeds capital expenditure of 263M by 12.24x, indicating strong organic growth funding capability.
  • Robust tangible asset base of 29.26B provides 11.48x coverage of working capital 2.55B, indicating strong operational backing.
  • Cash position of 1.20B provides exceptional 21.73x coverage of minority interest expenses 55M, indicating strong liquidity.

Bear case

  • Operating cash flow of 3.48B provides thin coverage of dividend payments of (629M) with a -5.53 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 1.20B provide limited coverage of acquisition spending of 1.96B, which is 0.61x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Free cash flow of 3.22B represents just -1.72x of debt issuance (1.87B), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Operating cash flow of 3.48B barely covers operating expenses of 3.85B with a 0.90 ratio, suggesting thin operational efficiency margins and limited flexibility.
  • Retained earnings of (245M) provide limited buffer against comprehensive income items of (3.84B), which is 0.06x, indicating elevated exposure to market risks.

Segments Breakdown of Revenue (2025)

Peer comparison

Companies in the Insurance Brokers
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 AON Aon plc 70.39 Bn 19.05 4.10 15.89 Bn
2 AJG Arthur J. Gallagher & Co. 54.84 Bn 36.71 3.93 13.49 Bn
3 WTW Willis Towers Watson Plc 19.93 Bn 59.66 5.32 5.91 Bn
4 BRO Brown & Brown, Inc. 19.47 Bn 80.03 11.73 7.86 Bn
5 ERIE Erie Indemnity Co 13.20 Bn 70.61 8.51 0.00 Bn
6 CRVL Corvel Corp 2.55 Bn 24.11 2.71 0.02 Bn
7 ARX Accelerant Holdings 1.78 Bn 65.50 2.96 0.12 Bn
8 GSHD Goosehead Insurance, Inc. 1.28 Bn 42.19 3.61 0.35 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.71 0.36
EV to Cash from Ops. EV/CFO 24.92 12.25
EV to Debt EV to Debt 5.46 7.89
EV to EBIT EV/EBIT 15.72 12.89
EV to EBITDA EV/EBITDA 16.34 10.03
EV to Free Cash Flow [EV/FCF] EV/FCF 26.95 0.82
EV to Market Cap EV to Market Cap 1.23 -2,042.77
EV to Revenue EV/Rev 5.05 2.24
Price to Book Value [P/B] P/B 7.53 2.88
Price to Earnings [P/E] P/E 19.05 21.56
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 5.87 1.26
Dividend Payout Ratio % Div Payout % (Qtr) 12.70 32.25
Dividend per Basic Share Div per Share (Qtr) 1.49 0.99
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 10.00 18.58
Interest Coverage Int. cover (Qtr) 6.77 -4.31
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -20.64 -64.94
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 10.14 1.65
Dividend Growth (1y) % Div 1y % (Qtr) -45.12 -3.13
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 32.58 -0.20
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 17.45 -8.63
EBIT Growth (1y) % EBIT 1y % (Qtr) 31.91 17.79
EBT Growth (1y) % EBT 1y % (Qtr) 38.52 32.64
EPS Growth (1y) % EPS 1y % (Qtr) 36.33 -77.22
FCF Growth (1y) % FCF 1y % (Qtr) 14.24 -60.35
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 9.45 44.50
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.34 0.62
Cash Payout Ratio Cash Payout (Qtr) 0.17 0.18
Cash Ratio Cash Ratio (Qtr) 0.05 0.51
Current Ratio Curr Ratio (Qtr) 1.11 2.20
Debt to Equity Ratio Debt/Equity (Qtr) 1.70 0.87
Interest Cover Ratio Int Coverage (Qtr) 6.77 -4.31
Times Interest Earned Times Interest Earned (Qtr) 6.77 -4.31
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 37.70 -2.17
EBIT Margin % EBIT Margin % (Qtr) 32.12 -69.72
EBT Margin % EBT Margin % (Qtr) 27.38 -8.04
Gross Margin % Gross Margin % (Qtr) 100.00 50.03
Net Profit Margin % Net Margin % (Qtr) 21.50 -10.75