MARSH & MCLENNAN COS (MMC) Stock Fundamental Analysis
NYSE:MMC - New York Stock Exchange, Inc. - US5717481023 - Common Stock - Currency: USD
Taking everything into account, MMC scores 5 out of 10 in our fundamental rating. MMC was compared to 145 industry peers in the Insurance industry. MMC scores excellent on profitability, but 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
MMC had positive earnings in the past year.
MMC had a positive operating cash flow in the past year.
In the past 5 years MMC has always been profitable.
Each year in the past 5 years MMC had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 7.09%, MMC belongs to the top of the industry, outperforming 94.48% of the companies in the same industry.
With an excellent Return On Equity value of 28.73%, MMC belongs to the best of the industry, outperforming 96.55% of the companies in the same industry.
The Return On Invested Capital of MMC (12.51%) is better than 98.62% of its industry peers.
The Average Return On Invested Capital over the past 3 years for MMC is significantly above the industry average of 4.07%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.09% | ||
| ROE | 28.73% | ||
| ROIC | 12.51% |
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
MMC has a Profit Margin of 16.13%. This is amongst the best in the industry. MMC outperforms 85.52% of its industry peers.
In the last couple of years the Profit Margin of MMC has grown nicely.
With an excellent Operating Margin value of 25.36%, MMC belongs to the best of the industry, outperforming 90.34% 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 | 25.36% | ||
| PM (TTM) | 16.13% | ||
| 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so MMC is still creating some value.
The number of shares outstanding for MMC remains at a similar level compared to 1 year ago.
The number of shares outstanding for MMC has been reduced compared to 5 years ago.
MMC has a worse debt/assets ratio than last year.
2.2 Solvency
MMC has an Altman-Z score of 2.98. 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 2.98 is amongst the best of the industry. MMC outperforms 93.79% of its industry peers.
MMC has a debt to FCF ratio of 4.91. This is a neutral value as MMC would need 4.91 years to pay back of all of its debts.
MMC's Debt to FCF ratio of 4.91 is on the low side compared to the rest of the industry. MMC is outperformed by 65.52% of its industry peers.
A Debt/Equity ratio of 1.42 is on the high side and indicates that MMC has dependencies on debt financing.
MMC's Debt to Equity ratio of 1.42 is on the low side compared to the rest of the industry. MMC is outperformed by 88.97% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.42 | ||
| Debt/FCF | 4.91 | ||
| Altman-Z | 2.98 |
ROIC/WACC1.54
WACC8.12%
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.
With an excellent Current ratio value of 1.14, MMC belongs to the best of the industry, outperforming 82.76% of the companies in the same industry.
MMC has a Quick 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 has a better Quick ratio (1.14) than 82.76% 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 8.86%, which is quite good.
MMC shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 13.56% yearly.
Looking at the last year, MMC shows a small growth in Revenue. The Revenue has grown by 7.56% in the last year.
The Revenue has been growing slightly by 7.99% on average over the past years.
EPS 1Y (TTM)8.86%
EPS 3Y12.5%
EPS 5Y13.56%
EPS Q2Q%5.88%
Revenue 1Y (TTM)7.56%
Revenue growth 3Y7.26%
Revenue growth 5Y7.99%
Sales Q2Q%9.08%
3.2 Future
The Earnings Per Share is expected to grow by 9.82% on average over the next years. This is quite good.
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 Y9.81%
EPS Next 2Y9.22%
EPS Next 3Y9.27%
EPS Next 5Y9.82%
Revenue Next Year10.71%
Revenue Next 2Y8.19%
Revenue Next 3Y7.28%
Revenue Next 5Y6.03%
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
Based on the Price/Earnings ratio of 23.61, the valuation of MMC can be described as rather expensive.
69.66% of the companies in the same industry are cheaper than MMC, based on the Price/Earnings ratio.
MMC is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.47, which is the current average of the S&P500 Index.
MMC is valuated rather expensively with a Price/Forward Earnings ratio of 20.17.
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 70.34% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.91, MMC is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.61 | ||
| Fwd PE | 20.17 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MMC indicates a slightly more expensive valuation: MMC is more expensive than 60.69% of the companies listed 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 71.03% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.98 | ||
| EV/EBITDA | 17.33 |
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)2.41
PEG (5Y)1.74
EPS Next 2Y9.22%
EPS Next 3Y9.27%
5. Dividend
5.1 Amount
MMC has a Yearly Dividend Yield of 1.52%. Purely for dividend investing, there may be better candidates out there.
MMC's Dividend Yield is comparable with the industry average which is at 3.64.
Compared to the average S&P500 Dividend Yield of 2.37, MMC is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.52% |
5.2 History
The dividend of MMC is nicely growing with an annual growth rate of 11.75%!
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
38.70% 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.
DP38.7%
EPS Next 2Y9.22%
EPS Next 3Y9.27%
211.74
-2.97 (-1.38%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners91.71%
Inst Owner Change0.09%
Ins Owners0.06%
Ins Owner Change3.53%
Market Cap104.33B
Analysts65.6
Price Target239.41 (13.07%)
Short Float %1.29%
Short Ratio2.95
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.52% |
Yearly Dividend3.08
Dividend Growth(5Y)11.75%
DP38.7%
Div Incr Years15
Div Non Decr Years19
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)2.91%
Min EPS beat(2)0.36%
Max EPS beat(2)5.46%
EPS beat(4)2
Avg EPS beat(4)1.3%
Min EPS beat(4)-0.57%
Max EPS beat(4)5.46%
EPS beat(8)6
Avg EPS beat(8)2.14%
EPS beat(12)10
Avg EPS beat(12)2.02%
EPS beat(16)14
Avg EPS beat(16)3.81%
Revenue beat(2)1
Avg Revenue beat(2)-0.13%
Min Revenue beat(2)-1.3%
Max Revenue beat(2)1.03%
Revenue beat(4)1
Avg Revenue beat(4)-0.93%
Min Revenue beat(4)-2.32%
Max Revenue beat(4)1.03%
Revenue beat(8)4
Avg Revenue beat(8)-0.12%
Revenue beat(12)4
Avg Revenue beat(12)-0.68%
Revenue beat(16)7
Avg Revenue beat(16)0.38%
PT rev (1m)-0.25%
PT rev (3m)-1.4%
EPS NQ rev (1m)0.08%
EPS NQ rev (3m)-0.67%
EPS NY rev (1m)-0.01%
EPS NY rev (3m)-0.28%
Revenue NQ rev (1m)0.07%
Revenue NQ rev (3m)0.2%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.2%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.61 | ||
| Fwd PE | 20.17 | ||
| P/S | 4.17 | ||
| P/FCF | 24.98 | ||
| P/OCF | 23.39 | ||
| P/B | 7.42 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.33 |
EPS(TTM)8.97
EY4.24%
EPS(NY)10.5
Fwd EY4.96%
FCF(TTM)8.48
FCFY4%
OCF(TTM)9.05
OCFY4.28%
SpS50.83
BVpS28.55
TBVpS-28.84
PEG (NY)2.41
PEG (5Y)1.74
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.09% | ||
| ROE | 28.73% | ||
| ROCE | 17.06% | ||
| ROIC | 12.51% | ||
| ROICexc | 13.05% | ||
| ROICexgc | 56.94% | ||
| OM | 25.36% | ||
| PM (TTM) | 16.13% | ||
| GM | N/A | ||
| FCFM | 16.68% |
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-Score4
Asset Turnover0.44
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.42 | ||
| Debt/FCF | 4.91 | ||
| Debt/EBITDA | 2.79 | ||
| Cap/Depr | 36.22% | ||
| Cap/Sales | 1.13% | ||
| Interest Coverage | 9.3 | ||
| Cash Conversion | 62.51% | ||
| Profit Quality | 103.37% | ||
| Current Ratio | 1.14 | ||
| Quick Ratio | 1.14 | ||
| Altman-Z | 2.98 |
F-Score4
WACC8.12%
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)8.86%
EPS 3Y12.5%
EPS 5Y13.56%
EPS Q2Q%5.88%
EPS Next Y9.81%
EPS Next 2Y9.22%
EPS Next 3Y9.27%
EPS Next 5Y9.82%
Revenue 1Y (TTM)7.56%
Revenue growth 3Y7.26%
Revenue growth 5Y7.99%
Sales Q2Q%9.08%
Revenue Next Year10.71%
Revenue Next 2Y8.19%
Revenue Next 3Y7.28%
Revenue Next 5Y6.03%
EBIT growth 1Y10.01%
EBIT growth 3Y12.14%
EBIT growth 5Y15.58%
EBIT Next Year23.6%
EBIT Next 3Y12.81%
EBIT Next 5Y8.85%
FCF growth 1Y44.03%
FCF growth 3Y8.62%
FCF growth 5Y15.49%
OCF growth 1Y33.24%
OCF growth 3Y6.96%
OCF growth 5Y12.75%