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Here's Why You Should Hold Aon (AON) Stock in Your Portfolio
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Aon plc (AON - Free Report) has been favored by investors on the back of cost-curbing measures and inorganic growth strategies.
This bullish sentiment is retained by the company’s continued beat streak in three of the last four quarters (missing the mark in one), the average earnings surprise being 2.1%. This upside further underlines its operational excellence.
Its return-on-equity (ROE) reflects growth potential. The company’s trailing 12-month ROE of 64.6% compares favorably with the industry average of 26.9%, reflecting its efficiency in utilizing its shareholders’ funds.
Being a leading insurance brokerage company, Aon always made buyouts to boost its portfolio like many of its peers. Its acquisitions mainly aim at expanding its health and benefits business, flood insurance solutions, and risk and insurance solution operations.
Strategic collaborations also expand the company’s capacity and make it one of the largest insurance brokers. In 2019 and 2020, it acquired businesses for a total valuation of $38 million and $368 million, respectively. In fact, it is going to close its Willis Towers Watson purchase in the first half of 2021.
Apart from these consolidations, Aon is consistently divesting its non-core operations to streamline its business and deepen its focus on more profitable operations, thus generating higher return on equity. These initiatives already started showing results by not just simplifying the company’s activities but also leading to its solid top-line growth.
In a bid to cut down on expenses, the company took several measures to reduce workforce and rationalize technology. In 2020, its operating expenses declined 6% year over year. Aon is committed to $800 million of expected cost synergies in 2021.
For the current year, management provided a solid guidance that should instil investors’ confidence in the stock.
Management expects modest growth, inching closer to mid-single-digits, in the first quarter of 2021. It projects to continue driving margin expansion in the ongoing year. Moreover, the company expects forex to leave a favorable impact of 20 cents per share on its first-quarter 2021 results (assuming currency to remain stable) owing to a weaker dollar than a euro. However, its exposure to negative forex fluctuation bothers. In 2020, forex left an unfavorable impact of 4 cents per share.
The Zacks Consensus Estimate for current-year earnings is pegged at $10.98, indicating a rise of 11.9% from the prior-year reported number.
Some better-ranked stocks in the same space are eHealth, Inc. (EHTH - Free Report) , Robert Half International Inc. (RHI - Free Report) and Brown & Brown, Inc. (BRO - Free Report) . While eHealth sports a Zacks Rank #1 (Strong Buy), Robert Half and Brown & Brown hold a Zacks Rank #2 (Buy) at present.
eHealth, Robert Half and Brown & Brown have a trailing four-quarter earnings surprise of 67.9%, 12.5% and 16.5%, on average, respectively.
Time to Invest in Legal Marijuana
If you’re looking for big gains, there couldn’t be a better time to get in on a young industry primed to skyrocket from $17.7 billion back in 2019 to an expected $73.6 billion by 2027.
After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could be a still greater bonanza for investors. Even before the latest wave of legalization, Zacks Investment Research has recommended pot stocks that have shot up as high as +285.9%
You’re invited to check out Zacks’ Marijuana Moneymakers: An Investor’s Guide. It features a timely Watch List of pot stocks and ETFs with exceptional growth potential.
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Here's Why You Should Hold Aon (AON) Stock in Your Portfolio
Aon plc (AON - Free Report) has been favored by investors on the back of cost-curbing measures and inorganic growth strategies.
This bullish sentiment is retained by the company’s continued beat streak in three of the last four quarters (missing the mark in one), the average earnings surprise being 2.1%. This upside further underlines its operational excellence.
Its return-on-equity (ROE) reflects growth potential. The company’s trailing 12-month ROE of 64.6% compares favorably with the industry average of 26.9%, reflecting its efficiency in utilizing its shareholders’ funds.
Being a leading insurance brokerage company, Aon always made buyouts to boost its portfolio like many of its peers. Its acquisitions mainly aim at expanding its health and benefits business, flood insurance solutions, and risk and insurance solution operations.
Strategic collaborations also expand the company’s capacity and make it one of the largest insurance brokers. In 2019 and 2020, it acquired businesses for a total valuation of $38 million and $368 million, respectively. In fact, it is going to close its Willis Towers Watson purchase in the first half of 2021.
Apart from these consolidations, Aon is consistently divesting its non-core operations to streamline its business and deepen its focus on more profitable operations, thus generating higher return on equity. These initiatives already started showing results by not just simplifying the company’s activities but also leading to its solid top-line growth.
In a bid to cut down on expenses, the company took several measures to reduce workforce and rationalize technology. In 2020, its operating expenses declined 6% year over year. Aon is committed to $800 million of expected cost synergies in 2021.
For the current year, management provided a solid guidance that should instil investors’ confidence in the stock.
Management expects modest growth, inching closer to mid-single-digits, in the first quarter of 2021. It projects to continue driving margin expansion in the ongoing year. Moreover, the company expects forex to leave a favorable impact of 20 cents per share on its first-quarter 2021 results (assuming currency to remain stable) owing to a weaker dollar than a euro.
However, its exposure to negative forex fluctuation bothers. In 2020, forex left an unfavorable impact of 4 cents per share.
The Zacks Consensus Estimate for current-year earnings is pegged at $10.98, indicating a rise of 11.9% from the prior-year reported number.
Price Performance
Shares of this presently Zacks Rank #3 (Hold) company have gained 11.9% year to date, wider than its industry’s growth of 7.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the same space are eHealth, Inc. (EHTH - Free Report) , Robert Half International Inc. (RHI - Free Report) and Brown & Brown, Inc. (BRO - Free Report) . While eHealth sports a Zacks Rank #1 (Strong Buy), Robert Half and Brown & Brown hold a Zacks Rank #2 (Buy) at present.
eHealth, Robert Half and Brown & Brown have a trailing four-quarter earnings surprise of 67.9%, 12.5% and 16.5%, on average, respectively.
Time to Invest in Legal Marijuana
If you’re looking for big gains, there couldn’t be a better time to get in on a young industry primed to skyrocket from $17.7 billion back in 2019 to an expected $73.6 billion by 2027.
After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could be a still greater bonanza for investors. Even before the latest wave of legalization, Zacks Investment Research has recommended pot stocks that have shot up as high as +285.9%
You’re invited to check out Zacks’ Marijuana Moneymakers: An Investor’s Guide. It features a timely Watch List of pot stocks and ETFs with exceptional growth potential.
Today, Download Marijuana Moneymakers FREE >>