MARSH & MCLENNAN COS (MMC)
US5717481023 - Common Stock
MMC gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 141 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.
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 (8.08%) than 93.57% of its industry peers.
MMC's Return On Equity of 29.43% is amongst the best of the industry. MMC outperforms 91.43% of its industry peers.
MMC has a Return On Invested Capital of 15.23%. This is amongst the best in the industry. MMC outperforms 98.57% of its industry peers.
MMC had an Average Return On Invested Capital over the past 3 years of 13.51%. This is significantly above the industry average of 4.38%.
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 80.71% 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 25.45%, MMC belongs to the top of the industry, outperforming 85.00% of the companies in the same industry.
MMC's Operating Margin has improved in the last couple of years.
| 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so MMC is creating value.
Compared to 1 year ago, MMC has less shares outstanding
Compared to 5 years ago, MMC has less shares outstanding
The debt/assets ratio for MMC is higher compared to a year ago.
2.2 Solvency
MMC has an Altman-Z score of 3.37. This indicates that MMC is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 3.37, MMC belongs to the best of the industry, outperforming 96.43% of the companies in the same industry.
The Debt to FCF ratio of MMC is 3.41, which is a good value as it means it would take MMC, 3.41 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of MMC (3.41) is worse than 60.71% of its industry peers.
A Debt/Equity ratio of 0.90 indicates that MMC is somewhat dependend on debt financing.
MMC has a Debt to Equity ratio of 0.90. This is amonst the worse of the industry: MMC underperforms 86.43% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.9 | ||
| Debt/FCF | 3.41 | ||
| Altman-Z | 3.37 |
ROIC/WACC1.82
WACC8.39%
2.3 Liquidity
MMC has a Current Ratio of 1.14. This is a normal value and indicates that MMC is financially healthy and should not expect problems in meeting its short term obligations.
MMC's Current ratio of 1.14 is amongst the best of the industry. MMC outperforms 81.43% 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 81.43% 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.
The Earnings Per Share has been growing by 12.62% 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 7.84% 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
The Earnings Per Share is expected to grow by 10.08% on average over the next years. This is quite good.
MMC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.25% yearly.
EPS Next Y11.62%
EPS Next 2Y9.92%
EPS Next 3Y9.75%
EPS Next 5Y10.08%
Revenue Next Year6.96%
Revenue Next 2Y8.34%
Revenue Next 3Y7.56%
Revenue Next 5Y5.25%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past 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
With a Price/Earnings ratio of 24.38, MMC is valued on the expensive side.
Based on the Price/Earnings ratio, MMC is valued a bit more expensive than the industry average as 70.00% of the companies are valued more cheaply.
The average S&P500 Price/Earnings ratio is at 27.83. MMC is around the same levels.
A Price/Forward Earnings ratio of 22.04 indicates a rather expensive valuation of MMC.
Based on the Price/Forward Earnings ratio, MMC is valued a bit more expensive than 70.71% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of MMC to the average of the S&P500 Index (22.65), we can say MMC is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.38 | ||
| Fwd PE | 22.04 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MMC is on the same level as its industry peers.
Based on the Price/Free Cash Flow ratio, MMC is valued a bit more expensive than 67.86% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.34 | ||
| EV/EBITDA | 16.96 |
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)2.1
PEG (5Y)1.93
EPS Next 2Y9.92%
EPS Next 3Y9.75%
5. Dividend
5.1 Amount
MMC has a Yearly Dividend Yield of 1.51%. Purely for dividend investing, there may be better candidates out there.
MMC's Dividend Yield is comparable with the industry average which is at 4.24.
Compared to the average S&P500 Dividend Yield of 2.24, MMC is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.51% |
5.2 History
On average, the dividend of MMC grows each year by 10.54%, 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)10.54%
Div Incr Years15
Div Non Decr Years19
5.3 Sustainability
MMC pays out 36.35% 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.
DP36.35%
EPS Next 2Y9.92%
EPS Next 3Y9.75%
MARSH & MCLENNAN COS
NYSE:MMC (12/18/2024, 8:04:00 PM)
After market: 209.89 0 (0%)209.89
-3.29 (-1.54%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap103.08B
Analysts
Price Target
Short Float %
Short Ratio
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.51% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
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EPS beat(8)
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EPS beat(16)
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Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.38 | ||
| Fwd PE | 22.04 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)2.1
PEG (5Y)1.93
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.08% | ||
| ROE | 29.43% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 25.45% | ||
| PM (TTM) | 16.82% | ||
| GM | N/A | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.48
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.9 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.14 | ||
| Quick Ratio | 1.14 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)12.26%
EPS 3Y16.61%
EPS 5Y
EPS Q2Q%
EPS Next Y11.62%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)7.84%
Revenue growth 3Y9.7%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y