MARSH & MCLENNAN COS (MMC) Stock Fundamental Analysis
NYSE:MMC - New York Stock Exchange, Inc. - US5717481023 - Common Stock
MMC gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 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. MMC is valied quite expensively at the moment, while 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.
In the past 5 years MMC always reported a positive cash flow from operatings.
1.2 Ratios
MMC has a better Return On Assets (8.08%) than 93.62% of its industry peers.
MMC has a better Return On Equity (29.43%) than 91.49% of its industry peers.
Looking at the Return On Invested Capital, with a value of 15.23%, MMC belongs to the top of the industry, outperforming 97.87% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for MMC is significantly above the industry average of 4.61%.
The 3 year average ROIC (13.51%) for MMC is below the current ROIC(15.23%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.08% | ||
| ROE | 29.43% | ||
| ROIC | 15.23% |
ROA(3y)7.96%
ROA(5y)7.11%
ROE(3y)29.45%
ROE(5y)26.57%
ROIC(3y)13.51%
ROIC(5y)11.84%
1.3 Margins
MMC has a Profit Margin of 16.82%. This is amongst the best in the industry. MMC outperforms 81.56% of its industry peers.
In the last couple of years the Profit Margin of MMC has grown nicely.
MMC has a Operating Margin of 25.45%. This is amongst the best in the industry. MMC outperforms 85.11% of its industry peers.
In the last couple of years the Operating Margin of MMC has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.45% | ||
| PM (TTM) | 16.82% | ||
| GM | N/A |
OM growth 3Y8.44%
OM growth 5Y5.86%
PM growth 3Y12.17%
PM growth 5Y8.4%
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.
MMC has less shares outstanding than it did 1 year ago.
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
An Altman-Z score of 3.41 indicates that MMC is not in any danger for bankruptcy at the moment.
MMC has a better Altman-Z score (3.41) than 95.74% of its industry peers.
MMC has a debt to FCF ratio of 3.41. This is a good value and a sign of high solvency as MMC would need 3.41 years to pay back of all of its debts.
The Debt to FCF ratio of MMC (3.41) is worse than 60.99% of its industry peers.
MMC has a Debt/Equity ratio of 0.90. This is a neutral value indicating MMC is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.90, MMC is doing worse than 86.52% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.9 | ||
| Debt/FCF | 3.41 | ||
| Altman-Z | 3.41 |
ROIC/WACC1.77
WACC8.6%
2.3 Liquidity
A Current Ratio of 1.14 indicates that MMC should not have too much problems paying its short term obligations.
The Current ratio of MMC (1.14) is better than 80.14% of its industry peers.
A Quick Ratio of 1.14 indicates that MMC should not have too much problems paying its short term obligations.
MMC has a better Quick ratio (1.14) than 80.14% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.14 | ||
| Quick Ratio | 1.14 |
3. Growth
3.1 Past
MMC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.26%, which is quite good.
Measured over the past years, MMC shows a quite strong growth in Earnings Per Share. The EPS has been growing by 12.62% on average per year.
Looking at the last year, MMC shows a small growth in Revenue. The Revenue has grown by 7.84% in the last year.
Measured over the past years, MMC shows a quite strong growth in Revenue. The Revenue has been growing by 8.75% on average per year.
EPS 1Y (TTM)12.26%
EPS 3Y16.61%
EPS 5Y12.62%
EPS Q2Q%10.88%
Revenue 1Y (TTM)7.84%
Revenue growth 3Y9.7%
Revenue growth 5Y8.75%
Sales Q2Q%5.85%
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 10.08% yearly.
MMC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.25% yearly.
EPS Next Y11.3%
EPS Next 2Y10.2%
EPS Next 3Y9.95%
EPS Next 5Y10.08%
Revenue Next Year7.09%
Revenue Next 2Y8.75%
Revenue Next 3Y7.89%
Revenue Next 5Y5.25%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
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 25.33, the valuation of MMC can be described as expensive.
Based on the Price/Earnings ratio, MMC is valued a bit more expensive than the industry average as 73.05% of the companies are valued more cheaply.
MMC is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 28.29, which is the current average of the S&P500 Index.
MMC is valuated rather expensively with a Price/Forward Earnings ratio of 22.79.
Based on the Price/Forward Earnings ratio, MMC is valued a bit more expensive than 72.34% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 24.44, MMC is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.33 | ||
| Fwd PE | 22.79 |
4.2 Price Multiples
MMC's Enterprise Value to EBITDA ratio is in line with 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 68.09% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.41 | ||
| EV/EBITDA | 17.32 |
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)2.24
PEG (5Y)2.01
EPS Next 2Y10.2%
EPS Next 3Y9.95%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.51%, MMC has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.99, MMC has a dividend in line with its industry peers.
Compared to the average S&P500 Dividend Yield of 2.28, MMC is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.51% |
5.2 History
The dividend of MMC is nicely growing with an annual growth rate of 10.54%!
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)10.54%
Div Incr Years15
Div Non Decr Years19
5.3 Sustainability
36.35% 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.
DP36.35%
EPS Next 2Y10.2%
EPS Next 3Y9.95%
MARSH & MCLENNAN COS
NYSE:MMC (1/22/2025, 11:47:03 AM)
218.106
-0.11 (-0.05%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners90.97%
Inst Owner Change0.08%
Ins Owners0.07%
Ins Owner Change0.05%
Market Cap107.12B
Analysts66.4
Price Target239.73 (9.91%)
Short Float %0.78%
Short Ratio2.05
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.51% |
Yearly Dividend2.63
Dividend Growth(5Y)10.54%
DP36.35%
Div Incr Years15
Div Non Decr Years19
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-0.3%
Min EPS beat(2)-0.57%
Max EPS beat(2)-0.03%
EPS beat(4)2
Avg EPS beat(4)0.93%
Min EPS beat(4)-0.57%
Max EPS beat(4)2.19%
EPS beat(8)6
Avg EPS beat(8)1.98%
EPS beat(12)10
Avg EPS beat(12)2.08%
EPS beat(16)14
Avg EPS beat(16)4.68%
Revenue beat(2)0
Avg Revenue beat(2)-1.72%
Min Revenue beat(2)-2.32%
Max Revenue beat(2)-1.11%
Revenue beat(4)1
Avg Revenue beat(4)-0.97%
Min Revenue beat(4)-2.32%
Max Revenue beat(4)0.28%
Revenue beat(8)3
Avg Revenue beat(8)-0.63%
Revenue beat(12)4
Avg Revenue beat(12)-0.45%
Revenue beat(16)8
Avg Revenue beat(16)0.87%
PT rev (1m)0.19%
PT rev (3m)4.24%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-2.85%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.97%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.29%
Revenue NY rev (1m)0.05%
Revenue NY rev (3m)0.11%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.33 | ||
| Fwd PE | 22.79 | ||
| P/S | 4.47 | ||
| P/FCF | 28.41 | ||
| P/OCF | 25.94 | ||
| P/B | 7.83 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.32 |
EPS(TTM)8.61
EY3.95%
EPS(NY)9.57
Fwd EY4.39%
FCF(TTM)7.68
FCFY3.52%
OCF(TTM)8.41
OCFY3.85%
SpS48.76
BVpS27.87
TBVpS-14.8
PEG (NY)2.24
PEG (5Y)2.01
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.08% | ||
| ROE | 29.43% | ||
| ROCE | 20.14% | ||
| ROIC | 15.23% | ||
| ROICexc | 16.19% | ||
| ROICexgc | 61.39% | ||
| OM | 25.45% | ||
| PM (TTM) | 16.82% | ||
| GM | N/A | ||
| FCFM | 15.74% |
ROA(3y)7.96%
ROA(5y)7.11%
ROE(3y)29.45%
ROE(5y)26.57%
ROIC(3y)13.51%
ROIC(5y)11.84%
ROICexc(3y)18.3%
ROICexc(5y)14.97%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)17.86%
ROCE(5y)15.66%
ROICexcg growth 3Y27.58%
ROICexcg growth 5Y12.91%
ROICexc growth 3Y18.19%
ROICexc growth 5Y4.85%
OM growth 3Y8.44%
OM growth 5Y5.86%
PM growth 3Y12.17%
PM growth 5Y8.4%
GM growth 3YN/A
GM growth 5YN/A
F-Score8
Asset Turnover0.48
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.9 | ||
| Debt/FCF | 3.41 | ||
| Debt/EBITDA | 1.81 | ||
| Cap/Depr | 49.11% | ||
| Cap/Sales | 1.5% | ||
| Interest Coverage | 9.99 | ||
| Cash Conversion | 60.51% | ||
| Profit Quality | 93.59% | ||
| Current Ratio | 1.14 | ||
| Quick Ratio | 1.14 | ||
| Altman-Z | 3.41 |
F-Score8
WACC8.6%
ROIC/WACC1.77
Cap/Depr(3y)60.15%
Cap/Depr(5y)58.5%
Cap/Sales(3y)2.07%
Cap/Sales(5y)2.15%
Profit Quality(3y)99.66%
Profit Quality(5y)112.17%
High Growth Momentum
Growth
EPS 1Y (TTM)12.26%
EPS 3Y16.61%
EPS 5Y12.62%
EPS Q2Q%10.88%
EPS Next Y11.3%
EPS Next 2Y10.2%
EPS Next 3Y9.95%
EPS Next 5Y10.08%
Revenue 1Y (TTM)7.84%
Revenue growth 3Y9.7%
Revenue growth 5Y8.75%
Sales Q2Q%5.85%
Revenue Next Year7.09%
Revenue Next 2Y8.75%
Revenue Next 3Y7.89%
Revenue Next 5Y5.25%
EBIT growth 1Y13.68%
EBIT growth 3Y18.95%
EBIT growth 5Y15.12%
EBIT Next Year24.33%
EBIT Next 3Y14.72%
EBIT Next 5Y7.57%
FCF growth 1Y30%
FCF growth 3Y8.03%
FCF growth 5Y12.59%
OCF growth 1Y21.26%
OCF growth 3Y7.98%
OCF growth 5Y11.89%