Aon plc (AON) stock analysis

P/E below its 5-year median

Aon's P/E of 18.4 is below its own 5-year median of 27.2.

P/E below the industry

Aon's P/E of 18.4 is below the Insurance Agents, Brokers, and Service median of 30.1.

P/S above the industry

Aon's price-to-sales of 4.04 is above the Insurance Agents, Brokers, and Service median of 3.43.

P/B above the industry

Aon's price-to-book of 7.07 is above the Insurance Agents, Brokers, and Service median of 4.81.

Trading below fair value

The share price of $336.55 is below our fair value estimate of $462.67.

Margin of safety over 20%

The price is 27.3% below fair value, more than the 20% cushion we look for.

Revenue growing 10%+ a year

Revenue grew 11.2% a year over the last three fiscal years.

EPS growing 10%+ a year

Diluted EPS grew 11.9% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 44.7% over the last twelve months, against a 5-year average of 13.4% a year.

Growing slower than the industry

Revenue grew 3.8% over the last twelve months; the Insurance Agents, Brokers, and Service median is 13.8%.

Guidance issued

The latest outlook (full year 2026 favorable impact on adjusted EPS from foreign currency translation, Jul 29, 2026) was issued for the first time, so it neither adds nor takes away points.

Gross margin trend

Banks and insurers do not report gross profit.

Return on equity over 15%

Return on equity was 43.6% over the last twelve months and averaged 294% over five years.

Return on assets over 1%

Return on assets was 6.7%; for a bank or insurer, 1% or more is considered good.

Return on equity above the industry

Aon's return on equity of 43.6% is above the Insurance Agents, Brokers, and Service median of 9.3%.

Earnings grew over 5 years

Net income grew 13.4% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 22.2% over the last twelve months, against a 5-year average of 17.7%.

Net margin above the industry

Aon's net margin of 22.2% is above the Insurance Agents, Brokers, and Service median of 4.9%.

High debt

Debt is 278% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 221% five years ago to 278%.

Debt not well covered by cash flow

Operating cash flow over the last twelve months equals 12.7% of total debt; we look for at least 20%.

Interest well covered

Operating income covers interest expense 6.2 times.

Short-term assets cover short-term debts

Current assets are 1.58 times current liabilities.

Bankruptcy risk (Altman Z)

The Altman model does not apply to insurers.

Pays a dividend

Aon paid dividends worth 0.5% of the share price over the last twelve months.

Yield below Treasuries

The 0.5% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Aon yields 0.5%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 17.1% of net income.

Covered by free cash flow

Dividends take 20.6% of free cash flow.