MARSH & MCLENNAN COS (MMC) Stock Fundamental Analysis
USA - NYSE:MMC - US5717481023 - Common Stock
197.4 USD
+0.57 (+0.29%)
197 USD
-0.4 (-0.2%)
MMC gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 146 industry peers in the Insurance industry. MMC scores excellent on profitability, but there are some minor concerns on its financial health. MMC is quite expensive at the moment. It does show a decent growth rate.
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.
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
Looking at the Return On Assets, with a value of 7.05%, MMC belongs to the top of the industry, outperforming 93.84% of the companies in the same industry.
MMC has a Return On Equity of 26.17%. This is amongst the best in the industry. MMC outperforms 93.15% of its industry peers.
Looking at the Return On Invested Capital, with a value of 12.56%, MMC belongs to the top of the industry, outperforming 97.95% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for MMC is significantly above the industry average of 4.47%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.05% | ||
| ROE | 26.17% | ||
| ROIC | 12.56% |
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's Profit Margin of 16.00% is amongst the best of the industry. MMC outperforms 85.62% of its industry peers.
In the last couple of years the Profit Margin of MMC has grown nicely.
MMC has a Operating Margin of 25.39%. This is amongst the best in the industry. MMC outperforms 91.10% of its industry peers.
MMC's Operating Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.39% | ||
| PM (TTM) | 16% | ||
| 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.
MMC has about the same amout of shares outstanding than it did 1 year ago.
MMC has less shares outstanding than it did 5 years ago.
The debt/assets ratio for MMC is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.89 indicates that MMC is not a great score, but indicates only limited risk for bankruptcy at the moment.
With an excellent Altman-Z score value of 2.89, MMC belongs to the best of the industry, outperforming 92.47% of the companies in the same industry.
The Debt to FCF ratio of MMC is 4.24, which is a neutral value as it means it would take MMC, 4.24 years of fcf income to pay off all of its debts.
MMC has a Debt to FCF ratio (4.24) which is comparable to the rest of the industry.
MMC has a Debt/Equity ratio of 1.21. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of MMC (1.21) is worse than 91.10% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.21 | ||
| Debt/FCF | 4.24 | ||
| Altman-Z | 2.89 |
ROIC/WACC1.61
WACC7.8%
2.3 Liquidity
MMC has a Current Ratio of 1.20. 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 Current ratio (1.20) than 80.82% of its industry peers.
MMC has a Quick Ratio of 1.20. 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 Quick ratio, with a value of 1.20, MMC belongs to the top of the industry, outperforming 80.82% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.2 | ||
| Quick Ratio | 1.2 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 9.82% over the past year.
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 quite strong growth in Revenue. The Revenue has grown by 9.18% in the last year.
Measured over the past years, MMC shows a small growth in Revenue. The Revenue has been growing by 7.99% on average per year.
EPS 1Y (TTM)9.82%
EPS 3Y12.5%
EPS 5Y13.56%
EPS Q2Q%12.86%
Revenue 1Y (TTM)9.18%
Revenue growth 3Y7.26%
Revenue growth 5Y7.99%
Sales Q2Q%12.1%
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 9.82% on average per year.
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 Y9.92%
EPS Next 2Y9%
EPS Next 3Y9.02%
EPS Next 5Y9.82%
Revenue Next Year10.95%
Revenue Next 2Y8.24%
Revenue Next 3Y7.35%
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
MMC is valuated rather expensively with a Price/Earnings ratio of 21.27.
MMC's Price/Earnings ratio is a bit more expensive when compared to the industry. MMC is more expensive than 70.55% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.20. MMC is valued slightly cheaper when compared to this.
The Price/Forward Earnings ratio is 18.88, which indicates a rather expensive current valuation of MMC.
Based on the Price/Forward Earnings ratio, MMC is valued a bit more expensive than the industry average as 69.18% of the companies are valued more cheaply.
MMC is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.70, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.27 | ||
| Fwd PE | 18.88 |
4.2 Price Multiples
MMC's Enterprise Value to EBITDA is on the same level as the industry average.
Based on the Price/Free Cash Flow ratio, MMC is valued a bit more expensive than 62.33% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.85 | ||
| EV/EBITDA | 15.52 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of MMC may justify a higher PE ratio.
PEG (NY)2.14
PEG (5Y)1.57
EPS Next 2Y9%
EPS Next 3Y9.02%
5. Dividend
5.1 Amount
MMC has a Yearly Dividend Yield of 1.77%. Purely for dividend investing, there may be better candidates out there.
MMC's Dividend Yield is comparable with the industry average which is at 3.43.
MMC's Dividend Yield is slightly below the S&P500 average, which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.77% |
5.2 History
On average, the dividend of MMC grows each year by 11.74%, which is quite nice.
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
39.18% 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.
DP39.18%
EPS Next 2Y9%
EPS Next 3Y9.02%
197.4
+0.57 (+0.29%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners92.23%
Inst Owner Change-0.94%
Ins Owners0.06%
Ins Owner Change0.23%
Market Cap97.05B
Analysts64.8
Price Target235.97 (19.54%)
Short Float %1.09%
Short Ratio2.23
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.77% |
Yearly Dividend3.08
Dividend Growth(5Y)11.74%
DP39.18%
Div Incr Years15
Div Non Decr Years19
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)0.83%
Min EPS beat(2)0.36%
Max EPS beat(2)1.3%
EPS beat(4)3
Avg EPS beat(4)1.77%
Min EPS beat(4)-0.03%
Max EPS beat(4)5.46%
EPS beat(8)6
Avg EPS beat(8)1.93%
EPS beat(12)10
Avg EPS beat(12)2.09%
EPS beat(16)14
Avg EPS beat(16)2.55%
Revenue beat(2)0
Avg Revenue beat(2)-0.79%
Min Revenue beat(2)-1.3%
Max Revenue beat(2)-0.29%
Revenue beat(4)1
Avg Revenue beat(4)-0.42%
Min Revenue beat(4)-1.3%
Max Revenue beat(4)1.03%
Revenue beat(8)3
Avg Revenue beat(8)-0.28%
Revenue beat(12)4
Avg Revenue beat(12)-0.69%
Revenue beat(16)6
Avg Revenue beat(16)-0.25%
PT rev (1m)0.39%
PT rev (3m)-1.69%
EPS NQ rev (1m)-0.29%
EPS NQ rev (3m)-0.53%
EPS NY rev (1m)0.04%
EPS NY rev (3m)0.09%
Revenue NQ rev (1m)-0.08%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)-0.04%
Revenue NY rev (3m)0.22%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.27 | ||
| Fwd PE | 18.88 | ||
| P/S | 3.76 | ||
| P/FCF | 20.85 | ||
| P/OCF | 19.74 | ||
| P/B | 6.15 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.52 |
EPS(TTM)9.28
EY4.7%
EPS(NY)10.45
Fwd EY5.3%
FCF(TTM)9.47
FCFY4.8%
OCF(TTM)10
OCFY5.07%
SpS52.48
BVpS32.07
TBVpS-26.28
PEG (NY)2.14
PEG (5Y)1.57
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.05% | ||
| ROE | 26.17% | ||
| ROCE | 16.73% | ||
| ROIC | 12.56% | ||
| ROICexc | 13.12% | ||
| ROICexgc | 55.24% | ||
| OM | 25.39% | ||
| PM (TTM) | 16% | ||
| GM | N/A | ||
| FCFM | 18.04% |
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)14.92%
ROICexc(5y)13.56%
ROICexgc(3y)71.76%
ROICexgc(5y)60.83%
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-Score5
Asset Turnover0.44
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.21 | ||
| Debt/FCF | 4.24 | ||
| Debt/EBITDA | 2.59 | ||
| Cap/Depr | 31.35% | ||
| Cap/Sales | 1.02% | ||
| Interest Coverage | 8.88 | ||
| Cash Conversion | 66.54% | ||
| Profit Quality | 112.77% | ||
| Current Ratio | 1.2 | ||
| Quick Ratio | 1.2 | ||
| Altman-Z | 2.89 |
F-Score5
WACC7.8%
ROIC/WACC1.61
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)9.82%
EPS 3Y12.5%
EPS 5Y13.56%
EPS Q2Q%12.86%
EPS Next Y9.92%
EPS Next 2Y9%
EPS Next 3Y9.02%
EPS Next 5Y9.82%
Revenue 1Y (TTM)9.18%
Revenue growth 3Y7.26%
Revenue growth 5Y7.99%
Sales Q2Q%12.1%
Revenue Next Year10.95%
Revenue Next 2Y8.24%
Revenue Next 3Y7.35%
Revenue Next 5Y6.03%
EBIT growth 1Y9.92%
EBIT growth 3Y12.14%
EBIT growth 5Y15.58%
EBIT Next Year25.68%
EBIT Next 3Y13.32%
EBIT Next 5Y8.85%
FCF growth 1Y49.31%
FCF growth 3Y8.62%
FCF growth 5Y15.49%
OCF growth 1Y38.51%
OCF growth 3Y6.96%
OCF growth 5Y12.75%