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

Earnings and Valuation

This table compares Kingstone Companies and Aon PLC’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Kingstone Companies $79.64 million 2.08 $16.03 million $1.20 13.00
Aon PLC $11.71 billion 3.11 $2.47 billion $5.11 27.23

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

Profitability

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

Net Margins Return on Equity Return on Assets
Kingstone Companies 12.34% 15.00% 5.39%
Aon PLC 12.23% 32.34% 6.87%

Institutional & Insider Ownership

42.7% of Kingstone Companies shares are owned by institutional investors. Comparatively, 86.1% of Aon PLC shares are owned by institutional investors. 10.3% of Kingstone Companies shares are owned by company insiders. Comparatively, 0.9% of Aon PLC shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

Kingstone Companies has a beta of 0.68, indicating that its share price is 32% less volatile than the S&P 500. Comparatively, Aon PLC has a beta of 1.03, indicating that its share price is 3% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Kingstone Companies and Aon PLC, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kingstone Companies 0 0 1 0 3.00
Aon PLC 1 9 4 0 2.21

Kingstone Companies currently has a consensus price target of $16.00, suggesting a potential upside of 2.56%. Aon PLC has a consensus price target of $130.70, suggesting a potential downside of 6.07%. Given Kingstone Companies’ stronger consensus rating and higher probable upside, analysts clearly believe Kingstone Companies is more favorable than Aon PLC.

Dividends

Kingstone Companies pays an annual dividend of $0.32 per share and has a dividend yield of 2.1%. Aon PLC pays an annual dividend of $1.44 per share and has a dividend yield of 1.0%. Kingstone Companies pays out 26.7% of its earnings in the form of a dividend. Aon PLC pays out 28.2% 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. Kingstone Companies has raised its dividend for 5 consecutive years. Kingstone Companies is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Aon PLC beats Kingstone Companies on 10 of the 17 factors compared between the two stocks.

About Kingstone Companies

Kingstone Companies, Inc. offers property and casualty insurance products to small businesses and individuals in New York State. The Company offers these products through its subsidiary, Kingstone Insurance Company (KICO). KICO is a licensed property and casualty insurance company. The Company operates through property and casualty insurances segment, which offers a range of property and casualty policies to its producers. The Company underwrites its business utilizing the CLUE industry claims database, insurance scoring reports, physical inspection of risks and other individual risk underwriting tools. It writes homeowners and dwelling fire business in New York City and Long Island. The Company’s product lines include personal lines, commercial liability, commercial automobile, livery physical damage and other. Its personal lines consist of homeowners, dwelling fire, renters, equipment breakdown and service line endorsements and personal umbrella policies.

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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