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Money:

The retirement income gap no-one is talking about

People are living longer than ever before and this can impact how you plan for retirement

Aon's (AON) Growth Strategies & Capital Strength Impress

Zacks Equity Research
Updated

Aon plc AON is a London-based leading insurance brokerage firm, which offers risk management services, human resource consulting and outsourcing services across the globe. The company’s initiatives to strengthen core business, efficient capital deployment, strong cash flow position and cost savings from its restructuring programs bode well for its long-term growth.

Probably on the back of these positives, the stock has attained shareholders’ confidence. Shares of Aon have gained 22% in last one year, outpacing the Zacks categorized Insurance Brokerage industry’s rally of 17%.

Also, the company displays significant capital strength. On the back of sufficient operating cash flow generation, Aon has been able to implement effective capital-management strategies. Its share buyback programs and dividend payments at regular intervals have been highly appreciated by shareholders.

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Over the last three years, numerous tuck-in acquisitions, mergers and strategic alliances have boosted the company’s inorganic growth. In 2016, its acquisition of Univers significantly enhanced its client servicing ability. Early in 2017, Aon completed the buyout of Brazilian benefits brokerage and solutions provider, Admix. These initiatives are expected to keep bolstering Aon’s growth potential.

Divestment of non-core operations to streamline its core businesses has been a major growth strategy for Aon. In the first quarter of 2017, it partnered with The Blackstone Group to sell its benefits administration and HR BPO platform to the latter, which is expected to help the company focus on more profitable operations and generate higher return on equity.

Aon has always been engaged in upgrading its products in order to maintain a competitive edge. Its client engagement program – Äon Client Promise – has driven nearly 90% client retention rate in 2016. Another initiative, Aon InPoint, helped to deal with market leading data and analytics. Furthermore, Aon Client Treaty is deemed to be the largest underwritten portfolio of risk. In 2016, Aon launched EU Data Protect to help protect organizations from some of the potential financial impacts of EU General Data Protection Regulation Act.

Zacks Rank and Other Stocks to Consider

Aon presently carries a Zacks Rank #2 (Buy).

Investors can also consider stocks from the insurance space like The Progressive Corporation PGR), American Financial Group, Inc. AFG and Argo Group International Holdings, Ltd. AGII. While Progressive sports a Zacks Rank #1 (Strong Buy), the other two stocks carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Progressive Corporation offers personal and commercial P&C insurance, and other specialty P&C insurance and related services, primarily in the United States. The company delivered positive surprises in two of the last four quarters with an average beat of 1.32%.

American Financial offers Property and Casualty (P&C) insurance products in the United States. The company delivered positive surprises in three of the last four quarters with an average beat of 6.45%.

Argo Group International Holdings underwrites specialty insurance and reinsurance products in the P&C market worldwide. The company delivered positive surprises in all of the last four quarters with an average beat of 36.54%.

Will You Make a Fortune on the Shift to Electric Cars?

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It's not the one you think.

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Aon PLC (AON) : Free Stock Analysis Report
 
Progressive Corporation (The) (PGR) : Free Stock Analysis Report
 
Argo Group International Holdings, Ltd. (AGII) : Free Stock Analysis Report
 
American Financial Group, Inc. (AFG) : Free Stock Analysis Report
 
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Zacks Investment Research