Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Aon plc (NYSE:AON) due to its excellent fundamentals in more than one area. AON is a financially-healthy company with an impressive track record and a excellent growth outlook. In the following section, I expand a bit more on these key aspects. If you’re interested in understanding beyond my broad commentary, take a look at the report on Aon here.
Reasonable growth potential with proven track record and pays a dividend
AON is an attractive stock for growth-seeking investors, with an expected earnings growth of 27% in the upcoming year which is expected to flow into an impressive return on equity of 49% over the next couple of years. AON delivered a triple-digit bottom-line expansion over the past couple of years, with its most recent earnings level surpassing its average level over the last five years. In addition to beating its historical values, AON also outperformed its industry, which delivered a growth of 1.8%. This is an notable feat for the company.
AON is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This indicates that AON has sufficient cash flows and proper cash management in place, which is an important determinant of the company’s health. AON seems to have put its debt to good use, generating operating cash levels of 0.27x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows.
For Aon, I’ve compiled three fundamental aspects you should further examine:
- Valuation: What is AON worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether AON is currently mispriced by the market.
- Dividend Income vs Capital Gains: Does AON return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from AON as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of AON? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.