On May 30, 2013, shares of
) reached a 52-week high of $67.26. The company posted positive
earnings surprise in three out of last four quarters with an
average beat of 2.33%.
On Apr 26, 2013, Aon reported its first-quarter 2013 adjusted
operating earnings of $1.11 in line with the Zacks Consensus
Estimate and was ahead of the year-ago earnings by 13%.
During the quarter, Aon's top line grew approximately 3% year
over year to $2.9 billion, although a tad lower than the Zacks
Consensus Estimate of $2.94 billion. Results were driven by
higher organic revenue, and commission and fees resulting from
acquisitions net of divestitures, partially mitigated by lower
Aon is expanding its business through partnerships and
strategic liaisons. Aon's partnership with BOLT Solutions Inc.
("Bolt"), announced on Apr 8, 2013, ("Bolt") is expected to
enhance its services and strengthen the customer base. We also
view favorably the partnership extension with
Manchester United Plc
) announced the same day. The new deal will be effective from Jul
1, 2013 and extend the liaison till 2021.
Moreover Aon has continuously tried to enhance shareholders'
worth through dividend payouts and share repurchases. In the
first quarter of 2013, the company deployed $300 billion to
repurchase 5 million Class A Ordinary shares and another $50
million to pay dividends.
Additionally, the board approved an 11% hike in its annual
dividend on Class A Ordinary shares to 70 cents from 63 cents
paid earlier. This further reflects the company's strong
liquidity position. Moreover, its consistent cash flow and
prudent cash balances continue to create strong liquidity.
Significant share repurchases are expected to bolster earnings of
Aon going forward. The Zacks Consensus Estimate for 2013 is
pegged at $4.72, up 12.03% year over year. The Zacks Consensus
Estimate for 2014 is $5.30, up 12.28% year over year. The overall
long-term expected earnings growth rate for this stock is 10.0%.
Valuation looks attractive for Aon. The shares are trading at a
9.8% discount to the peer group average, on a forward
price-to-earnings basis. Return on equity remains 43.5% above the
peer group average of 12.4%. The 1-year return from the stock is
35.35%, higher than the S&P 500's return of 27.73%.
Aon currently carries a Zacks Rank #3 (Hold). Other stocks in
this industry such as
Validus Holdings Ltd.
) carries a favorable Zacks rank #1 (Strong Buy) while
Everest Re Limited
) carries a Zacks Rank #2 (Buy) and appear impressive.
AON PLC (AON): Free Stock Analysis Report
MANCHESTER UTD (MANU): Free Stock Analysis
EVEREST RE LTD (RE): Free Stock Analysis
VALIDUS HOLDING (VR): Free Stock Analysis
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