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%)
Overall MMC gets a fundamental rating of 5 out of 10. We evaluated MMC against 148 industry peers in the Insurance industry. While MMC has a great profitability rating, 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.
- In the past 5 years MMC has always 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 (7.02%) than 90.60% of its industry peers.
- MMC has a better Return On Equity (27.24%) than 93.29% of its industry peers.
- MMC has a better Return On Invested Capital (13.33%) than 95.97% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for MMC is in line with the industry average of 14.94%.
| 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
- The Profit Margin of MMC (15.60%) is better than 79.87% of its industry peers.
- MMC's Profit Margin has improved in the last couple of years.
- MMC has a Operating Margin of 25.20%. This is amongst the best in the industry. MMC outperforms 87.25% 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
- With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), MMC is creating some value.
- The number of shares outstanding for MMC remains at a similar level compared to 1 year ago.
- MMC has less shares outstanding than it did 5 years ago.
- Compared to 1 year ago, MMC has a worse debt to assets ratio.
2.2 Solvency
- MMC has an Altman-Z score of 2.75. This is not the best score and indicates that MMC is in the grey zone with still only limited risk for bankruptcy at the moment.
- MMC's Altman-Z score of 2.75 is amongst the best of the industry. MMC outperforms 93.96% of its industry peers.
- MMC has a debt to FCF ratio of 4.06. This is a neutral value as MMC would need 4.06 years to pay back of 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 42.95% of its industry peers.
- MMC has a Debt/Equity ratio of 1.21. This is a high value indicating a heavy dependency on external financing.
- Looking at the Debt to Equity ratio, with a value of 1.21, MMC is doing worse than 88.59% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.21 | ||
| Debt/FCF | 4.06 | ||
| Altman-Z | 2.75 |
ROIC/WACC1.69
WACC7.9%
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.
- Looking at the Current ratio, with a value of 1.12, MMC belongs to the top of the industry, outperforming 81.88% of the companies in the same industry.
- 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.
- The Quick ratio of MMC (1.12) is better than 81.88% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.12 | ||
| Quick Ratio | 1.12 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 10.34% over the past year.
- 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 10.47% in the last year.
- The Revenue has been growing slightly by 7.99% on average over the past years.
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.
- The Revenue is expected to grow by 6.03% on average over the next years.
EPS Next Y10.15%
EPS Next 2Y8.69%
EPS Next 3Y8.81%
EPS Next 5Y9.82%
Revenue Next Year10.68%
Revenue Next 2Y7.79%
Revenue Next 3Y6.92%
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 19.23, which indicates a rather expensive current valuation of MMC.
- 66.44% of the companies in the same industry are cheaper than MMC, based on the Price/Earnings ratio.
- The average S&P500 Price/Earnings ratio is at 27.25. MMC is valued slightly cheaper when compared to this.
- A Price/Forward Earnings ratio of 17.57 indicates a rather expensive valuation of MMC.
- Based on the Price/Forward Earnings ratio, MMC is valued a bit more expensive than 64.43% of the companies in the same industry.
- MMC is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 25.98, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.23 | ||
| Fwd PE | 17.57 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, MMC is valued a bit more expensive than 60.40% 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 61.07% 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 an expensive valuation of the company.
- MMC has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.89
PEG (5Y)1.42
EPS Next 2Y8.69%
EPS Next 3Y8.81%
5. Dividend
5.1 Amount
- MMC has a Yearly Dividend Yield of 1.94%. Purely for dividend investing, there may be better candidates out there.
- Compared to an average industry Dividend Yield of 2.41, MMC has a dividend in line with its industry peers.
- 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 paid a dividend for at least 10 years, which is 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
- 40.17% of the earnings are spent on dividend by MMC. This is a bit on the high side, but may be sustainable.
- The dividend of MMC is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP40.17%
EPS Next 2Y8.69%
EPS Next 3Y8.81%
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 10.15% 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%.