AA (OTCMKTS: AATDF) and Aon plc Class A (NYSE:AON) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, valuation, risk, institutional ownership, analyst recommendations, earnings and profitability.
Aon plc Class A pays an annual dividend of $1.44 per share and has a dividend yield of 1.0%. AA does not pay a dividend. Aon plc Class A pays out 22.1% of its earnings in the form of a dividend. Aon plc Class A has increased its dividend for 6 consecutive years.
This table compares AA and Aon plc Class A’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Aon plc Class A||12.26%||32.41%||6.49%|
This is a breakdown of recent ratings for AA and Aon plc Class A, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Aon plc Class A||1||9||4||0||2.21|
Aon plc Class A has a consensus price target of $146.10, suggesting a potential upside of 5.72%. Given Aon plc Class A’s higher possible upside, analysts clearly believe Aon plc Class A is more favorable than AA.
Volatility and Risk
AA has a beta of 1.37, indicating that its share price is 37% more volatile than the S&P 500. Comparatively, Aon plc Class A has a beta of 1.03, indicating that its share price is 3% more volatile than the S&P 500.
Institutional & Insider Ownership
87.3% of Aon plc Class A shares are owned by institutional investors. 0.9% of Aon plc Class A shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Earnings and Valuation
This table compares AA and Aon plc Class A’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Aon plc Class A||$10.00 billion||3.40||$1.23 billion||$6.52||21.20|
Aon plc Class A has higher revenue and earnings than AA.
Aon plc Class A beats AA on 10 of the 12 factors compared between the two stocks.
About Aon plc Class A
Aon plc (Aon) is a global provider of risk management services, insurance and reinsurance brokerage, and human resource consulting and outsourcing, delivering distinctive client value via risk management and workforce productivity solutions. The Company operates in two segments: Risk Solutions and Human Resource (HR) Solutions. On April 2, 2012, the Company completed the reorganization of the corporate structure of the group of companies controlled by its predecessor, Aon Corporation, as holding company of the Aon group, pursuant to which Aon Corporation merged with one of its indirect, wholly owned subsidiaries and Aon plc became the parent company of the Aon group. In July 2012, ABN Amro Bank NV sold its insurance unit to Aon.
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