On Feb 18, 2014, shares of
) reached a new 52-week high of $85.84. The momentum was driven
by solid fourth-quarter earnings results, which included a 0.7%
positive earnings surprise. Its fourth-quarter operating earnings
of $1.54 per share improved 21% year over year. The
outperformance was driven by the company's operating strength,
low effective tax rate and capital management initiatives
implemented in the quarter.
With respect to earnings trend, this financial service providing
company witnessed positive earnings surprises in three of the
last four quarters, with an average beat of 3.4%. In terms of
revenues, Aon delivered 3% year-over-year improvement, although
the number missed the Zacks Consensus Estimate by a whisker.
Growth in organic revenues across almost all the segments helped
boost the overall revenues of the company. Although expenses shot
up, the rise was offset by the increased sales, leading to margin
Aon has been consistent in enhancing shareholders' value through
dividend payouts and share repurchases. In the fourth quarter of
2013, the company expended $77 billion to repurchase 0.97 million
Class A Ordinary shares. With a strong cash position we expect
this company to come up with more such endeavors to retain
Aon is pursuing a number of acquisitions and other global
expansion strategies that are expected to help the company better
serve its clients and generate more revenues. In 2013, Aon's
collaborations with National Council on Aging (NCOA),
XL Group plc
Manchester United plc
), National Football League (NFL), Johannesburg-based cricket
team bizhub Highveld Lions, Catalyst Payment Reform (CPR), Bolt
Solutions Inc. and an Israeli HR consulting firm - AKT - have
enhanced its services. Further, the acquisition of Dempsey
Partners by Aon Global Risk Consulting in Jun 2013 improved the
company's risk solutions capacities, whereas the acquisition of
Stratford 360 should help Aon meet the demand of comprehensive
and value-added benefits solutions of the rapidly evolving
The stock gained almost 46% in 1-year period. The overall
long-term expected earnings growth rate for this stock is
projected at 10.0%. The Zacks Consensus Estimate for 2014 is
pegged at $5.21, up 6.6% year over year while the same for 2015
is $5.83, up 11.9% year over year.
Aon currently carries a Zacks Rank #3 (Hold). However, another
better-ranked stock in the same sector is
Marsh & McLennan Companies, Inc.
) with a Zacks Rank #2 (Buy).
AON PLC (AON): Free Stock Analysis Report
MANCHESTER UTD (MANU): Free Stock Analysis
MARSH &MCLENNAN (MMC): Free Stock Analysis
XL GROUP PLC (XL): Free Stock Analysis Report
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