AON: Quiet Compounder Preparing Its Next Move!?ROE: 46.3% — top-tier profitability backed by real cash flow.
Net Margin: 16.9% — significantly above industry average.
Free Cash Flow: $2.8B+ annually — strong ability to cover dividends, buybacks, and debt obligations.
Dividend Growth: 11 consecutive years — low payout ratio (~25%), very sustainable.
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🏢 Company Snapshot:
Market Cap: ~$72.5 billion
Employees: ~50,000
Founded: 1982
Headquarters: London, United Kingdom
🌎 What Aon Does:
Aon plc is a global leader in risk management, insurance brokerage, and human capital solutions, helping organizations safeguard their assets, people, and long-term value in an increasingly complex world.
🛡️ Risk-Focused Excellence:
Through cutting-edge data analytics, consulting services, and integrated solutions, Aon supports businesses across commercial risk, reinsurance, health, and retirement sectors.
📚 Fun Facts:
The name "Aon" comes from the Gaelic word for "oneness", reflecting its mission to deliver unified solutions to clients.
Aon was a key broker for insuring the World Trade Center and played a critical role in redefining corporate risk coverage post-9/11.
The company was portrayed in the movie The Big Short as one of the key firms advising institutions during the financial crisis.
🔹 Key Strengths:
ROE: 46.3% — top-tier profitability backed by real cash flow.
Net Margin: 16.9% — significantly above industry average.
Free Cash Flow: $2.8B+ annually — strong ability to cover dividends, buybacks, and debt obligations.
Dividend Growth: 11 consecutive years — low payout ratio (~25%), very sustainable.
🔹 Concerns:
Debt-to-Equity: 2.58 — leverage higher than peer average; manageable but worth monitoring.
Valuation: P/E 26.5× — trading at a premium compared to Marsh & McLennan (MMC) and Willis Towers Watson (WTW).
📈 Current Technical Setup: Break&Retest
For nearly three years, the $320–$350 zone acted like a stone wall for AON, a major resistance barrier where every breakout attempt failed.
The price consistently struggled to break through... until late 2024, when a decisive breakout finally occurred, fueled by strong earnings momentum and resilient cash flow generation.
Now, AON has pulled back to retest this critical area — a former resistance that may transform into supercharged support.
This is a textbook example of Break & Retest behavior: price breaking a multi-year resistance, then returning to find liquidity and new buyers at the same key zone.
Fundamentally, AON continues to deliver high ROE (46%), strong margins (17%), and solid free cash flow, making it an attractive name for investors looking for stability and compound growth — exactly the kind of stock that buyers often defend during technical retests.
📋 Final Thoughts:
Aon is a quiet powerhouse in risk and advisory services, compounding cash flows year after year.
If you're looking for steady long-term growth, resilient profitability, and shareholder-aligned management, AON deserves a spot on your watchlist.
Patience matters though — at current prices, buying on weakness could offer better long-term returns.
Always do your own analysis and make sure it matches your risk profile.
If your view aligns with mine — you're basically ready to go. 😉
Cheers,
Vaido
