Aon PLC (AON) & eHealth (NASDAQ:EHTH) Critical Contrast

eHealth (NASDAQ: EHTH) and Aon PLC (NYSE:AON) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, risk, analyst recommendations, dividends, valuation and profitability.

Profitability

This table compares eHealth and Aon PLC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
eHealth -3.44% -5.64% -4.50%
Aon PLC 17.28% 32.62% 6.89%

Analyst Ratings

This is a breakdown of current ratings and price targets for eHealth and Aon PLC, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
eHealth 0 1 3 0 2.75
Aon PLC 1 8 4 0 2.23

eHealth presently has a consensus target price of $17.67, indicating a potential upside of 0.78%. Aon PLC has a consensus target price of $138.78, indicating a potential upside of 0.28%. Given eHealth’s stronger consensus rating and higher possible upside, research analysts plainly believe eHealth is more favorable than Aon PLC.

Dividends

Aon PLC pays an annual dividend of $1.44 per share and has a dividend yield of 1.0%. eHealth does not pay a dividend. Aon PLC pays out 20.5% of its earnings in the form of a dividend. Aon PLC has increased its dividend for 5 consecutive years.

Volatility & Risk

eHealth has a beta of 1.56, suggesting that its stock price is 56% more volatile than the S&P 500. Comparatively, Aon PLC has a beta of 1.03, suggesting that its stock price is 3% more volatile than the S&P 500.

Insider & Institutional Ownership

93.6% of eHealth shares are held by institutional investors. Comparatively, 86.4% of Aon PLC shares are held by institutional investors. 6.2% of eHealth shares are held by insiders. Comparatively, 0.9% of Aon PLC shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares eHealth and Aon PLC’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
eHealth $182.74 million 1.77 -$4.31 million ($0.35) -50.08
Aon PLC $11.80 billion 2.98 $2.54 billion $7.03 19.69

Aon PLC has higher revenue and earnings than eHealth. eHealth is trading at a lower price-to-earnings ratio than Aon PLC, indicating that it is currently the more affordable of the two stocks.

Summary

Aon PLC beats eHealth on 10 of the 16 factors compared between the two stocks.

About eHealth

eHealth, Inc. provides a private online source of health insurance for individuals, families and small businesses. The Company is the parent company of eHealthInsurance, a private health insurance exchange where individuals, families and small businesses can compare health insurance products from various insurers side-by-side, and purchase and enroll in coverage online through its Websites (www.eHealth.com, www.eHealthInsurance.com, www.eHealthMedicare.com, www.Medicare.com and www.PlanPrescriber.com) or telephonically through its customer care centers. The Company also offers various online and pharmacy-based tools to help seniors navigate Medicare health insurance options, choose the right plan, and enroll in plans online or telephonically. It markets the availability of individual and family, small business and ancillary health insurance plans of various insurance carriers through its e-commerce platforms (www.eHealth.com and www.eHealthInsurance.com).

About Aon PLC

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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