MARSH & MCLENNAN COS (MMC) Stock Fundamental Analysis
USA - NYSE:MMC - US5717481023 - Common Stock
202.93 USD
-0.53 (-0.26%)
202.93 USD
0 (0%)
MMC gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 146 industry peers in the Insurance industry. MMC scores excellent on profitability, 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
MMC had positive earnings in the past year.
MMC had a positive operating cash flow in the past year.
MMC had positive earnings in each of the past 5 years.
In the past 5 years MMC always reported a positive cash flow from operatings.
1.2 Ratios
MMC has a Return On Assets of 7.05%. This is amongst the best in the industry. MMC outperforms 93.84% of its industry peers.
MMC's Return On Equity of 26.17% is amongst the best of the industry. MMC outperforms 93.15% of its industry peers.
MMC has a better Return On Invested Capital (12.56%) than 97.95% of its industry peers.
MMC had an Average Return On Invested Capital over the past 3 years of 13.69%. This is significantly above the industry average of 4.47%.
| 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
With an excellent Profit Margin value of 16.00%, MMC belongs to the best of the industry, outperforming 85.62% of the companies in the same industry.
MMC's Profit Margin has improved in the last couple of years.
MMC has a better Operating Margin (25.39%) than 91.10% of its industry peers.
In the last couple of years the Operating Margin of MMC has grown nicely.
| 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.
Compared to 1 year ago, MMC has about the same amount of shares outstanding.
MMC has less shares outstanding than it did 5 years ago.
MMC has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.94 indicates that MMC is not a great score, but indicates only limited risk for bankruptcy at the moment.
MMC's Altman-Z score of 2.94 is amongst the best of the industry. MMC outperforms 92.47% of its industry peers.
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.
Looking at the Debt to FCF ratio, with a value of 4.24, MMC is in line with its industry, outperforming 42.47% of the companies in the same industry.
MMC has a Debt/Equity ratio of 1.21. This is a high value indicating a heavy dependency on external financing.
MMC has a worse Debt to Equity ratio (1.21) than 91.10% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.21 | ||
| Debt/FCF | 4.24 | ||
| Altman-Z | 2.94 |
ROIC/WACC1.6
WACC7.83%
2.3 Liquidity
A Current Ratio of 1.20 indicates that MMC should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.20, MMC belongs to the top of the industry, outperforming 80.82% of the companies in the same industry.
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.
The Quick ratio of MMC (1.20) is better than 80.82% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.2 | ||
| Quick Ratio | 1.2 |
3. Growth
3.1 Past
MMC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 9.82%, which is quite good.
The Earnings Per Share has been growing by 13.56% on average over the past years. This is quite good.
Looking at the last year, MMC shows a quite strong growth in Revenue. The Revenue has grown by 9.18% in the last year.
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)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.
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 Y9.92%
EPS Next 2Y9%
EPS Next 3Y9.02%
EPS Next 5Y9.82%
Revenue Next Year10.95%
Revenue Next 2Y8.24%
Revenue Next 3Y7.35%
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
Based on the Price/Earnings ratio of 21.87, the valuation of MMC can be described as rather expensive.
Based on the Price/Earnings ratio, MMC is valued a bit more expensive than 71.23% of the companies in the same industry.
When comparing the Price/Earnings ratio of MMC to the average of the S&P500 Index (27.30), we can say MMC is valued inline with the index average.
The Price/Forward Earnings ratio is 19.41, which indicates a rather expensive current valuation of MMC.
Based on the Price/Forward Earnings ratio, MMC is valued a bit more expensive than the industry average as 69.18% of the companies are valued more cheaply.
The average S&P500 Price/Forward Earnings ratio is at 22.73. MMC is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.87 | ||
| Fwd PE | 19.41 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as MMC.
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 62.33% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.44 | ||
| EV/EBITDA | 15.92 |
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 an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.2
PEG (5Y)1.61
EPS Next 2Y9%
EPS Next 3Y9.02%
5. Dividend
5.1 Amount
MMC has a Yearly Dividend Yield of 1.77%.
MMC's Dividend Yield is comparable with the industry average which is at 3.53.
MMC's Dividend Yield is slightly below the S&P500 average, which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.77% |
5.2 History
On average, the dividend of MMC grows each year by 11.74%, which is quite nice.
MMC has been paying a dividend for at least 10 years, so it has a reliable track record.
MMC has not decreased their dividend for at least 10 years, which is a reliable track record.
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.
The dividend of MMC is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP39.18%
EPS Next 2Y9%
EPS Next 3Y9.02%
202.93
-0.53 (-0.26%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners92.23%
Inst Owner Change-0.94%
Ins Owners0.06%
Ins Owner Change0.14%
Market Cap99.76B
Analysts64.8
Price Target235.97 (16.28%)
Short Float %1.09%
Short Ratio2.19
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.77% |
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)0.39%
PT rev (3m)-1.69%
EPS NQ rev (1m)-0.29%
EPS NQ rev (3m)-0.53%
EPS NY rev (1m)0.04%
EPS NY rev (3m)0.09%
Revenue NQ rev (1m)-0.08%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)-0.04%
Revenue NY rev (3m)0.22%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.87 | ||
| Fwd PE | 19.41 | ||
| P/S | 3.87 | ||
| P/FCF | 21.44 | ||
| P/OCF | 20.29 | ||
| P/B | 6.33 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.92 |
EPS(TTM)9.28
EY4.57%
EPS(NY)10.45
Fwd EY5.15%
FCF(TTM)9.47
FCFY4.66%
OCF(TTM)10
OCFY4.93%
SpS52.48
BVpS32.07
TBVpS-26.28
PEG (NY)2.2
PEG (5Y)1.61
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 | 2.94 |
F-Score5
WACC7.83%
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 Y9.92%
EPS Next 2Y9%
EPS Next 3Y9.02%
EPS Next 5Y9.82%
Revenue 1Y (TTM)9.18%
Revenue growth 3Y7.26%
Revenue growth 5Y7.99%
Sales Q2Q%12.1%
Revenue Next Year10.95%
Revenue Next 2Y8.24%
Revenue Next 3Y7.35%
Revenue Next 5Y6.03%
EBIT growth 1Y9.92%
EBIT growth 3Y12.14%
EBIT growth 5Y15.58%
EBIT Next Year25.68%
EBIT Next 3Y13.32%
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%