MARSH & MCLENNAN COS (MMC) Stock Fundamental Analysis
NYSE:MMC - New York Stock Exchange, Inc. - US5717481023 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to MMC. MMC was compared to 143 industry peers in the Insurance industry. While MMC belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. While showing a medium growth rate, MMC is valued expensive at the moment.
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.
In the past 5 years MMC always reported a positive cash flow from operatings.
1.2 Ratios
With an excellent Return On Assets value of 7.19%, MMC belongs to the best of the industry, outperforming 89.36% of the companies in the same industry.
With an excellent Return On Equity value of 30.43%, MMC belongs to the best of the industry, outperforming 93.62% of the companies in the same industry.
The Return On Invested Capital of MMC (12.66%) is better than 96.45% 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 4.59%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.19% | ||
| ROE | 30.43% | ||
| ROIC | 12.66% |
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
The Profit Margin of MMC (16.60%) is better than 80.14% of its industry peers.
In the last couple of years the Profit Margin of MMC has grown nicely.
Looking at the Operating Margin, with a value of 25.38%, MMC belongs to the top of the industry, outperforming 87.23% of the companies in the same industry.
In the last couple of years the Operating Margin of MMC has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.38% | ||
| PM (TTM) | 16.6% | ||
| 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), MMC is creating some value.
Compared to 1 year ago, MMC has about the same amount of shares outstanding.
The number of shares outstanding for MMC has been reduced compared to 5 years ago.
The debt/assets ratio for MMC is higher compared to a year ago.
2.2 Solvency
MMC has an Altman-Z score of 3.05. This indicates that MMC is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 3.05, MMC belongs to the best of the industry, outperforming 95.74% of the companies in the same industry.
MMC has a debt to FCF ratio of 5.00. This is a neutral value as MMC would need 5.00 years to pay back of all of its debts.
With a Debt to FCF ratio value of 5.00, MMC is not doing good in the industry: 65.25% of the companies in the same industry are doing better.
MMC has a Debt/Equity ratio of 1.46. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 1.46, MMC is not doing good in the industry: 91.49% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.46 | ||
| Debt/FCF | 5 | ||
| Altman-Z | 3.05 |
ROIC/WACC1.54
WACC8.24%
2.3 Liquidity
MMC has a Current Ratio of 1.13. This is a normal value and indicates that MMC is financially healthy and should not expect problems in meeting its short term obligations.
With an excellent Current ratio value of 1.13, MMC belongs to the best of the industry, outperforming 80.85% of the companies in the same industry.
A Quick Ratio of 1.13 indicates that MMC should not have too much problems paying its short term obligations.
MMC's Quick ratio of 1.13 is amongst the best of the industry. MMC outperforms 80.85% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.13 | ||
| Quick Ratio | 1.13 |
3. Growth
3.1 Past
MMC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.68%, 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 small growth in Revenue. The Revenue has grown by 7.57% in the last year.
The Revenue has been growing slightly by 7.99% on average over the past years.
EPS 1Y (TTM)11.68%
EPS 3Y12.5%
EPS 5Y13.56%
EPS Q2Q%11.31%
Revenue 1Y (TTM)7.57%
Revenue growth 3Y7.26%
Revenue growth 5Y7.99%
Sales Q2Q%9.24%
3.2 Future
Based on estimates for the next years, MMC will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.68% on average per year.
The Revenue is expected to grow by 4.77% on average over the next years.
EPS Next Y10.62%
EPS Next 2Y10%
EPS Next 3Y9.75%
EPS Next 5Y9.68%
Revenue Next Year10.35%
Revenue Next 2Y8.09%
Revenue Next 3Y6.98%
Revenue Next 5Y4.77%
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
MMC is valuated quite expensively with a Price/Earnings ratio of 26.14.
Based on the Price/Earnings ratio, MMC is valued a bit more expensive than the industry average as 75.18% of the companies are valued more cheaply.
MMC's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 29.63.
MMC is valuated rather expensively with a Price/Forward Earnings ratio of 23.63.
Compared to the rest of the industry, the Price/Forward Earnings ratio of MMC indicates a slightly more expensive valuation: MMC is more expensive than 70.92% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of MMC to the average of the S&P500 Index (22.68), we can say MMC is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.14 | ||
| Fwd PE | 23.63 |
4.2 Price Multiples
MMC's Enterprise Value to EBITDA is on the same level as the industry average.
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 66.67% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.34 | ||
| EV/EBITDA | 18.81 |
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.
The excellent profitability rating of MMC may justify a higher PE ratio.
PEG (NY)2.46
PEG (5Y)1.93
EPS Next 2Y10%
EPS Next 3Y9.75%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.41%, MMC has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.09, MMC has a dividend in line with its industry peers.
MMC's Dividend Yield is slightly below the S&P500 average, which is at 2.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.41% |
5.2 History
On average, the dividend of MMC grows each year by 11.75%, 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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)11.75%
Div Incr Years15
Div Non Decr Years19
5.3 Sustainability
37.27% of the earnings are spent on dividend by MMC. This is a low number and sustainable payout ratio.
The dividend of MMC is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP37.27%
EPS Next 2Y10%
EPS Next 3Y9.75%
230.01
-0.56 (-0.24%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners91.98%
Inst Owner Change1.66%
Ins Owners0.07%
Ins Owner Change0.2%
Market Cap112.96B
Analysts65.6
Price Target237.83 (3.4%)
Short Float %0.84%
Short Ratio2
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.41% |
Yearly Dividend3.08
Dividend Growth(5Y)11.75%
DP37.27%
Div Incr Years15
Div Non Decr Years19
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)2.71%
Min EPS beat(2)-0.03%
Max EPS beat(2)5.46%
EPS beat(4)2
Avg EPS beat(4)1.76%
Min EPS beat(4)-0.57%
Max EPS beat(4)5.46%
EPS beat(8)6
Avg EPS beat(8)2.26%
EPS beat(12)10
Avg EPS beat(12)2.5%
EPS beat(16)14
Avg EPS beat(16)4.72%
Revenue beat(2)1
Avg Revenue beat(2)-0.04%
Min Revenue beat(2)-1.11%
Max Revenue beat(2)1.03%
Revenue beat(4)2
Avg Revenue beat(4)-0.53%
Min Revenue beat(4)-2.32%
Max Revenue beat(4)1.03%
Revenue beat(8)4
Avg Revenue beat(8)0.04%
Revenue beat(12)4
Avg Revenue beat(12)-0.58%
Revenue beat(16)8
Avg Revenue beat(16)0.77%
PT rev (1m)-1.7%
PT rev (3m)-0.46%
EPS NQ rev (1m)-0.16%
EPS NQ rev (3m)-0.26%
EPS NY rev (1m)1.73%
EPS NY rev (3m)2.2%
Revenue NQ rev (1m)0.18%
Revenue NQ rev (3m)3.68%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.09%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.14 | ||
| Fwd PE | 23.63 | ||
| P/S | 4.62 | ||
| P/FCF | 28.34 | ||
| P/OCF | 26.26 | ||
| P/B | 8.47 | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.81 |
EPS(TTM)8.8
EY3.83%
EPS(NY)9.73
Fwd EY4.23%
FCF(TTM)8.12
FCFY3.53%
OCF(TTM)8.76
OCFY3.81%
SpS49.8
BVpS27.17
TBVpS-30.1
PEG (NY)2.46
PEG (5Y)1.93
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.19% | ||
| ROE | 30.43% | ||
| ROCE | 16.79% | ||
| ROIC | 12.66% | ||
| ROICexc | 13.54% | ||
| ROICexgc | 72.67% | ||
| OM | 25.38% | ||
| PM (TTM) | 16.6% | ||
| GM | N/A | ||
| FCFM | 16.3% |
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)18.5%
ROICexc(5y)15.7%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
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-Score6
Asset Turnover0.43
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.46 | ||
| Debt/FCF | 5 | ||
| Debt/EBITDA | 2.79 | ||
| Cap/Depr | 42.36% | ||
| Cap/Sales | 1.29% | ||
| Interest Coverage | 10.5 | ||
| Cash Conversion | 61.87% | ||
| Profit Quality | 98.18% | ||
| Current Ratio | 1.13 | ||
| Quick Ratio | 1.13 | ||
| Altman-Z | 3.05 |
F-Score6
WACC8.24%
ROIC/WACC1.54
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)11.68%
EPS 3Y12.5%
EPS 5Y13.56%
EPS Q2Q%11.31%
EPS Next Y10.62%
EPS Next 2Y10%
EPS Next 3Y9.75%
EPS Next 5Y9.68%
Revenue 1Y (TTM)7.57%
Revenue growth 3Y7.26%
Revenue growth 5Y7.99%
Sales Q2Q%9.24%
Revenue Next Year10.35%
Revenue Next 2Y8.09%
Revenue Next 3Y6.98%
Revenue Next 5Y4.77%
EBIT growth 1Y11.18%
EBIT growth 3Y12.14%
EBIT growth 5Y15.58%
EBIT Next Year24.61%
EBIT Next 3Y12.34%
EBIT Next 5Y6.67%
FCF growth 1Y4.21%
FCF growth 3Y8.62%
FCF growth 5Y15.49%
OCF growth 1Y1.03%
OCF growth 3Y6.96%
OCF growth 5Y12.75%