MARSH & MCLENNAN COS (MMC) Stock Fundamental Analysis
USA - NYSE:MMC - US5717481023 - Common Stock
205.36 USD
-1.66 (-0.8%)
205.03 USD
-0.33 (-0.16%)
MMC gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 145 industry peers in the Insurance industry. MMC has an excellent profitability rating, but 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.
MMC had a positive operating cash flow in the past year.
Each year in the past 5 years MMC has been profitable.
MMC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of MMC (7.05%) is better than 94.48% of its industry peers.
MMC has a Return On Equity of 26.17%. This is amongst the best in the industry. MMC outperforms 93.10% of its industry peers.
MMC's Return On Invested Capital of 12.56% is amongst the best of the industry. MMC outperforms 97.93% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for MMC is significantly above the industry average of 4.40%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.05% | ||
| ROE | 26.17% | ||
| ROIC | 12.56% |
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's Profit Margin of 16.00% is amongst the best of the industry. MMC outperforms 85.52% of its industry peers.
In the last couple of years the Profit Margin of MMC has grown nicely.
MMC has a Operating Margin of 25.39%. This is amongst the best in the industry. MMC outperforms 90.34% of its industry peers.
MMC's Operating Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.39% | ||
| PM (TTM) | 16% | ||
| 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
MMC has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
MMC has about the same amout of shares outstanding than it did 1 year ago.
MMC has less shares outstanding than it did 5 years ago.
The debt/assets ratio for MMC is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.97 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 2.97, MMC belongs to the best of the industry, outperforming 92.41% of the companies in the same industry.
MMC has a debt to FCF ratio of 4.24. This is a neutral value as MMC would need 4.24 years to pay back of all of its debts.
MMC's Debt to FCF ratio of 4.24 is in line compared to the rest of the industry. MMC outperforms 43.45% 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 91.03% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.21 | ||
| Debt/FCF | 4.24 | ||
| Altman-Z | 2.97 |
ROIC/WACC1.6
WACC7.84%
2.3 Liquidity
MMC has a Current Ratio of 1.20. 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 better Current ratio (1.20) than 80.69% of its industry peers.
MMC has a Quick Ratio of 1.20. 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 1.20. This is amongst the best in the industry. MMC outperforms 80.69% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.2 | ||
| Quick Ratio | 1.2 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 9.82% over the past year.
Measured over the past years, MMC shows a quite strong growth in Earnings Per Share. The EPS has been growing by 13.56% on average per year.
MMC shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 9.18%.
The Revenue has been growing slightly by 7.99% on average over the past years.
EPS 1Y (TTM)9.82%
EPS 3Y12.5%
EPS 5Y13.56%
EPS Q2Q%12.86%
Revenue 1Y (TTM)9.18%
Revenue growth 3Y7.26%
Revenue growth 5Y7.99%
Sales Q2Q%12.1%
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.
MMC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.03% yearly.
EPS Next Y9.76%
EPS Next 2Y9.04%
EPS Next 3Y9.1%
EPS Next 5Y9.82%
Revenue Next Year10.92%
Revenue Next 2Y8.21%
Revenue Next 3Y7.3%
Revenue Next 5Y6.03%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 22.13, which indicates a rather expensive current valuation of MMC.
MMC's Price/Earnings ratio is a bit more expensive when compared to the industry. MMC is more expensive than 73.10% of the companies in the same industry.
MMC's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.35.
A Price/Forward Earnings ratio of 19.63 indicates a rather expensive valuation of MMC.
68.97% of the companies in the same industry are cheaper than MMC, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 22.86. MMC is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.13 | ||
| Fwd PE | 19.63 |
4.2 Price Multiples
MMC's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. MMC is more expensive than 61.38% of the companies in the same industry.
MMC's Price/Free Cash Flow ratio is a bit more expensive when compared to the industry. MMC is more expensive than 61.38% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.69 | ||
| EV/EBITDA | 16.2 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
MMC has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.27
PEG (5Y)1.63
EPS Next 2Y9.04%
EPS Next 3Y9.1%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.75%, MMC has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.54, MMC has a dividend in line with its industry peers.
Compared to the average S&P500 Dividend Yield of 2.44, MMC is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.75% |
5.2 History
The dividend of MMC is nicely growing with an annual growth rate of 11.74%!
MMC has paid a dividend for at least 10 years, which is 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 39.18% of its income as dividend. This is a sustainable payout ratio.
MMC's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP39.18%
EPS Next 2Y9.04%
EPS Next 3Y9.1%
205.36
-1.66 (-0.8%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners92.4%
Inst Owner Change-0.15%
Ins Owners0.06%
Ins Owner Change0.28%
Market Cap100.96B
Analysts65.38
Price Target235.97 (14.91%)
Short Float %1.12%
Short Ratio2.37
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.75% |
Yearly Dividend3.08
Dividend Growth(5Y)11.74%
DP39.18%
Div Incr Years15
Div Non Decr Years19
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)0.83%
Min EPS beat(2)0.36%
Max EPS beat(2)1.3%
EPS beat(4)3
Avg EPS beat(4)1.77%
Min EPS beat(4)-0.03%
Max EPS beat(4)5.46%
EPS beat(8)6
Avg EPS beat(8)1.93%
EPS beat(12)10
Avg EPS beat(12)2.09%
EPS beat(16)14
Avg EPS beat(16)2.55%
Revenue beat(2)0
Avg Revenue beat(2)-0.79%
Min Revenue beat(2)-1.3%
Max Revenue beat(2)-0.29%
Revenue beat(4)1
Avg Revenue beat(4)-0.42%
Min Revenue beat(4)-1.3%
Max Revenue beat(4)1.03%
Revenue beat(8)3
Avg Revenue beat(8)-0.28%
Revenue beat(12)4
Avg Revenue beat(12)-0.69%
Revenue beat(16)6
Avg Revenue beat(16)-0.25%
PT rev (1m)0%
PT rev (3m)-1.44%
EPS NQ rev (1m)-0.35%
EPS NQ rev (3m)-1.05%
EPS NY rev (1m)-0.15%
EPS NY rev (3m)-0.11%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.16%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)0.07%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.13 | ||
| Fwd PE | 19.63 | ||
| P/S | 3.91 | ||
| P/FCF | 21.69 | ||
| P/OCF | 20.53 | ||
| P/B | 6.4 | ||
| P/tB | N/A | ||
| EV/EBITDA | 16.2 |
EPS(TTM)9.28
EY4.52%
EPS(NY)10.46
Fwd EY5.09%
FCF(TTM)9.47
FCFY4.61%
OCF(TTM)10
OCFY4.87%
SpS52.48
BVpS32.07
TBVpS-26.28
PEG (NY)2.27
PEG (5Y)1.63
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.05% | ||
| ROE | 26.17% | ||
| ROCE | 16.73% | ||
| ROIC | 12.56% | ||
| ROICexc | 13.12% | ||
| ROICexgc | 55.24% | ||
| OM | 25.39% | ||
| PM (TTM) | 16% | ||
| GM | N/A | ||
| FCFM | 18.04% |
ROA(3y)7.31%
ROA(5y)7.43%
ROE(3y)30.08%
ROE(5y)28.19%
ROIC(3y)13.69%
ROIC(5y)12.5%
ROICexc(3y)14.92%
ROICexc(5y)13.56%
ROICexgc(3y)71.76%
ROICexgc(5y)60.83%
ROCE(3y)18.16%
ROCE(5y)16.58%
ROICexcg growth 3Y14.51%
ROICexcg growth 5Y14.25%
ROICexc growth 3Y1.96%
ROICexc growth 5Y7.02%
OM growth 3Y4.55%
OM growth 5Y7.02%
PM growth 3Y1.54%
PM growth 5Y9.67%
GM growth 3YN/A
GM growth 5YN/A
F-Score5
Asset Turnover0.44
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.21 | ||
| Debt/FCF | 4.24 | ||
| Debt/EBITDA | 2.59 | ||
| Cap/Depr | 31.35% | ||
| Cap/Sales | 1.02% | ||
| Interest Coverage | 8.88 | ||
| Cash Conversion | 66.54% | ||
| Profit Quality | 112.77% | ||
| Current Ratio | 1.2 | ||
| Quick Ratio | 1.2 | ||
| Altman-Z | 2.97 |
F-Score5
WACC7.84%
ROIC/WACC1.6
Cap/Depr(3y)56.15%
Cap/Depr(5y)53.95%
Cap/Sales(3y)1.82%
Cap/Sales(5y)1.91%
Profit Quality(3y)99.4%
Profit Quality(5y)109.53%
High Growth Momentum
Growth
EPS 1Y (TTM)9.82%
EPS 3Y12.5%
EPS 5Y13.56%
EPS Q2Q%12.86%
EPS Next Y9.76%
EPS Next 2Y9.04%
EPS Next 3Y9.1%
EPS Next 5Y9.82%
Revenue 1Y (TTM)9.18%
Revenue growth 3Y7.26%
Revenue growth 5Y7.99%
Sales Q2Q%12.1%
Revenue Next Year10.92%
Revenue Next 2Y8.21%
Revenue Next 3Y7.3%
Revenue Next 5Y6.03%
EBIT growth 1Y9.92%
EBIT growth 3Y12.14%
EBIT growth 5Y15.58%
EBIT Next Year25.69%
EBIT Next 3Y13.16%
EBIT Next 5Y8.85%
FCF growth 1Y49.31%
FCF growth 3Y8.62%
FCF growth 5Y15.49%
OCF growth 1Y38.51%
OCF growth 3Y6.96%
OCF growth 5Y12.75%