Stock of the Day

June 12, 2020

AON (AON)

$389.51
-$3.56 (-0.9%)
Market Cap: $84.90B

About AON

Aon Plc engages in the provision of risk, health, and wealth solutions. It focuses on risk capital including claim management, reinsurance, risk analysis, management, retention, and transfer; and human capital involving analytics, health and benefits, investments, pensions and retirement, talent and rewards, and workplace wellbeing. The company was founded in 1982 and is headquartered in Dublin, Ireland.

AON Bull Case

Here are some ways that investors could benefit from investing in Aon plc:

  • Aon plc has a strong dividend payout, recently distributing $0.675 per share, which translates to an annualized dividend of $2.70. This indicates a commitment to returning value to shareholders.
  • Recent analyst upgrades have increased the price targets for Aon plc, with estimates now ranging from $380.00 to $420.00. This suggests a positive outlook on the stock's performance.
  • The current stock price is approximately $394.00, reflecting a robust market position and investor confidence, especially following recent upgrades from major financial institutions.
  • Aon plc operates in the insurance and risk management sector, which is essential for businesses, ensuring a steady demand for its services even in fluctuating economic conditions.
  • The company has a low payout ratio of 21.33%, indicating that it retains a significant portion of its earnings for reinvestment, which can support future growth and stability.

AON Bear Case

Investors should be bearish about investing in Aon plc for these reasons:

  • Despite recent upgrades, one analyst has rated Aon plc with a sell rating, indicating potential concerns about its future performance.
  • The average rating for Aon plc is currently "Hold," which may suggest that while the stock is stable, there is limited upside potential in the near term.
  • With a yield of only 0.70%, the dividend may not be attractive enough for income-focused investors compared to other investment opportunities.
  • The insurance and risk management industry can be highly competitive, and Aon plc faces challenges from both established players and new entrants, which could impact its market share.
  • Market volatility can affect the performance of Aon plc, as economic downturns may lead to reduced demand for its services, impacting revenue growth.

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