MARSH & MCLENNAN COS (MMC) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:MMC - US5717481023 - Common Stock
182.7 USD
-2.93 (-1.58%)
182.7 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to MMC. MMC was compared to 149 industry peers in the Insurance industry. While MMC has a great profitability rating, there are some minor concerns on its financial health. MMC is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
- In the past year MMC was profitable.
- In the past year MMC had a positive cash flow from operations.
- Each year in the past 5 years MMC has been profitable.
- Each year in the past 5 years MMC had a positive operating cash flow.
1.2 Ratios
- The Return On Assets of MMC (7.02%) is better than 89.93% of its industry peers.
- MMC has a better Return On Equity (27.24%) than 92.62% of its industry peers.
- MMC's Return On Invested Capital of 13.33% is amongst the best of the industry. MMC outperforms 95.30% of its industry peers.
- MMC had an Average Return On Invested Capital over the past 3 years of 13.69%. This is in line with the industry average of 14.92%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.02% | ||
| ROE | 27.24% | ||
| ROIC | 13.33% |
ROA(3y)7.31%
ROA(5y)7.43%
ROE(3y)30.08%
ROE(5y)28.19%
ROIC(3y)13.69%
ROIC(5y)12.5%
1.3 Margins
- MMC has a Profit Margin of 15.60%. This is in the better half of the industry: MMC outperforms 79.19% of its industry peers.
- MMC's Profit Margin has improved in the last couple of years.
- MMC's Operating Margin of 25.20% is amongst the best of the industry. MMC outperforms 86.58% of its industry peers.
- In the last couple of years the Operating Margin of MMC has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.2% | ||
| PM (TTM) | 15.6% | ||
| GM | N/A |
OM growth 3Y4.55%
OM growth 5Y7.02%
PM growth 3Y1.54%
PM growth 5Y9.67%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so MMC is still creating some value.
- MMC has about the same amout of shares outstanding than it did 1 year ago.
- Compared to 5 years ago, MMC has less shares outstanding
- The debt/assets ratio for MMC is higher compared to a year ago.
2.2 Solvency
- An Altman-Z score of 2.75 indicates that MMC is not a great score, but indicates only limited risk for bankruptcy at the moment.
- With an excellent Altman-Z score value of 2.75, MMC belongs to the best of the industry, outperforming 94.63% of the companies in the same industry.
- The Debt to FCF ratio of MMC is 4.06, which is a neutral value as it means it would take MMC, 4.06 years of fcf income to pay off all of its debts.
- MMC has a Debt to FCF ratio of 4.06. This is comparable to the rest of the industry: MMC outperforms 42.28% of its industry peers.
- A Debt/Equity ratio of 1.21 is on the high side and indicates that MMC has dependencies on debt financing.
- MMC has a Debt to Equity ratio of 1.21. This is amonst the worse of the industry: MMC underperforms 89.26% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.21 | ||
| Debt/FCF | 4.06 | ||
| Altman-Z | 2.75 |
ROIC/WACC1.68
WACC7.92%
2.3 Liquidity
- MMC has a Current Ratio of 1.12. This is a normal value and indicates that MMC is financially healthy and should not expect problems in meeting its short term obligations.
- MMC's Current ratio of 1.12 is amongst the best of the industry. MMC outperforms 81.21% of its industry peers.
- MMC has a Quick Ratio of 1.12. This is a normal value and indicates that MMC is financially healthy and should not expect problems in meeting its short term obligations.
- MMC has a Quick ratio of 1.12. This is amongst the best in the industry. MMC outperforms 81.21% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.12 | ||
| Quick Ratio | 1.12 |
3. Growth
3.1 Past
- MMC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 10.34%, which is quite good.
- MMC shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 13.56% yearly.
- The Revenue has grown by 10.47% in the past year. This is quite good.
- Measured over the past years, MMC shows a small growth in Revenue. The Revenue has been growing by 7.99% on average per year.
EPS 1Y (TTM)10.34%
EPS 3Y12.5%
EPS 5Y13.56%
EPS Q2Q%13.5%
Revenue 1Y (TTM)10.47%
Revenue growth 3Y7.26%
Revenue growth 5Y7.99%
Sales Q2Q%11.48%
3.2 Future
- MMC is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.82% yearly.
- Based on estimates for the next years, MMC will show a small growth in Revenue. The Revenue will grow by 6.03% on average per year.
EPS Next Y10.18%
EPS Next 2Y8.77%
EPS Next 3Y8.9%
EPS Next 5Y9.82%
Revenue Next Year10.69%
Revenue Next 2Y7.81%
Revenue Next 3Y6.94%
Revenue Next 5Y6.03%
3.3 Evolution
- The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 19.23, MMC is valued on the expensive side.
- 67.11% of the companies in the same industry are cheaper than MMC, based on the Price/Earnings ratio.
- MMC's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.21.
- Based on the Price/Forward Earnings ratio of 17.55, the valuation of MMC can be described as rather expensive.
- Based on the Price/Forward Earnings ratio, MMC is valued a bit more expensive than 65.77% of the companies in the same industry.
- MMC's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 24.26.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.23 | ||
| Fwd PE | 17.55 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, MMC is valued a bit more expensive than 61.07% of the companies in the same industry.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of MMC indicates a slightly more expensive valuation: MMC is more expensive than 60.40% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.55 | ||
| EV/EBITDA | 14.12 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates MMC does not grow enough to justify the current Price/Earnings ratio.
- MMC has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.89
PEG (5Y)1.42
EPS Next 2Y8.77%
EPS Next 3Y8.9%
5. Dividend
5.1 Amount
- MMC has a Yearly Dividend Yield of 1.94%.
- MMC's Dividend Yield is comparable with the industry average which is at 2.53.
- Compared to an average S&P500 Dividend Yield of 1.82, MMC has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.94% |
5.2 History
- The dividend of MMC is nicely growing with an annual growth rate of 11.74%!
- MMC has been paying a dividend for at least 10 years, so it has a reliable track record.
- MMC has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)11.74%
Div Incr Years15
Div Non Decr Years19
5.3 Sustainability
- MMC pays out 40.17% of its income as dividend. This is a bit on the high side, but may be sustainable.
- MMC's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP40.17%
EPS Next 2Y8.77%
EPS Next 3Y8.9%
MARSH & MCLENNAN COS / MMC FAQ
What is the fundamental rating for MMC stock?
ChartMill assigns a fundamental rating of 5 / 10 to MMC.
What is the valuation status of MARSH & MCLENNAN COS (MMC) stock?
ChartMill assigns a valuation rating of 2 / 10 to MARSH & MCLENNAN COS (MMC). This can be considered as Overvalued.
Can you provide the profitability details for MARSH & MCLENNAN COS?
MARSH & MCLENNAN COS (MMC) has a profitability rating of 7 / 10.
What is the earnings growth outlook for MARSH & MCLENNAN COS?
The Earnings per Share (EPS) of MARSH & MCLENNAN COS (MMC) is expected to grow by 10.18% in the next year.
Is the dividend of MARSH & MCLENNAN COS sustainable?
The dividend rating of MARSH & MCLENNAN COS (MMC) is 5 / 10 and the dividend payout ratio is 40.17%.