Head-To-Head Analysis: Axis Capital (NYSE:AXS) and AON (NYSE:AON)

AON (NYSE:AON) and Axis Capital (NYSE:AXS) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, valuation and dividends.

Analyst Ratings

This is a summary of current ratings and recommmendations for AON and Axis Capital, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AON	3	6	13	0	2.45
Axis Capital	0	5	9	0	2.64

AON presently has a consensus target price of $369.12, suggesting a potential upside of 9.86%. Axis Capital has a consensus target price of $120.00, suggesting a potential upside of 12.82%. Given Axis Capital’s stronger consensus rating and higher probable upside, analysts plainly believe Axis Capital is more favorable than AON.

Profitability

This table compares AON and Axis Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AON	22.24%	40.46%	7.20%
Axis Capital	14.62%	16.61%	2.71%

Dividends

AON pays an annual dividend of $3.28 per share and has a dividend yield of 1.0%. Axis Capital pays an annual dividend of $1.76 per share and has a dividend yield of 1.7%. AON pays out 18.0% of its earnings in the form of a dividend. Axis Capital pays out 13.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Axis Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

86.1% of AON shares are held by institutional investors. Comparatively, 93.4% of Axis Capital shares are held by institutional investors. 1.0% of AON shares are held by insiders. Comparatively, 0.6% of Axis Capital shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Risk and Volatility

AON has a beta of 0.63, indicating that its stock price is 37% less volatile than the S&P 500. Comparatively, Axis Capital has a beta of 0.39, indicating that its stock price is 61% less volatile than the S&P 500.

Valuation and Earnings

This table compares AON and Axis Capital”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AON	$17.18 billion	4.15	$3.69 billion	$18.26	18.40
Axis Capital	$6.56 billion	1.16	$1.01 billion	$13.09	8.13

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

Summary

AON beats Axis Capital on 11 of the 16 factors compared between the two stocks.

About AON

Aon Plc engages in the provision of risk, health, and wealth solutions. It focuses on risk capital including claim management, reinsurance, risk analysis, management, retention, and transfer; and human capital involving analytics, health and benefits, investments, pensions and retirement, talent and rewards, and workplace wellbeing. The company was founded in 1982 and is headquartered in Dublin, Ireland.

About Axis Capital

AXIS Capital Holdings Limited, through its subsidiaries, provides various specialty insurance and reinsurance products in Bermuda, the United States, and internationally. It operates through two segments, Insurance and Reinsurance. The Insurance segment offers professional insurance products that cover directors' and officers' liability, errors and omissions, employment practices, fiduciary, crime, professional indemnity, medical malpractice, and other financial insurance related coverages for commercial enterprises, financial institutions, not-for-profit organizations, and other professional service providers; and property insurance products for commercial buildings, residential premises, construction projects, property in transit, onshore renewable energy installations, and physical damage and business interruption following an act of terrorism. This segment also provides marine and aviation insurance services for offshore energy, renewable offshore energy, cargo, liability, including kidnap and ransom, fine art, specie, and hull war, hull and liability, and specific war coverage for passenger airlines, cargo operations, general aviation operations, airports, aviation authorities, security firms, and product manufacturers; personal accident, travel insurance, specialty health products for employer and affinity groups, and pet insurance products; and liability, cyber, and credit and political risk insurance services. The Reinsurance segment offers agriculture, marine and aviation, catastrophe, accidental and health, credit and surety, motor, professional, travel, life, engineering, property, and liability reinsurance products. AXIS Capital Holdings Limited was founded in 2001 and is headquartered in Pembroke, Bermuda.