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 143 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
In the past year MMC was profitable.
MMC had a positive operating cash flow in the past year.
MMC had positive earnings in each of the past 5 years.
MMC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 7.05%, MMC belongs to the top of the industry, outperforming 93.71% of the companies in the same industry.
Looking at the Return On Equity, with a value of 26.17%, MMC belongs to the top of the industry, outperforming 93.71% of the companies in the same industry.
With an excellent Return On Invested Capital value of 12.56%, MMC belongs to the best of the industry, outperforming 98.60% 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 4.04%.
| 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 85.31% 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 92.31% of its industry peers.
In the last couple of years the Operating Margin of MMC has grown nicely.
| 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.
The number of shares outstanding for MMC remains at a similar level compared to 1 year ago.
Compared to 5 years ago, MMC has less shares outstanding
MMC has a worse debt/assets ratio than last year.
2.2 Solvency
MMC has an Altman-Z score of 2.97. 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.
With an excellent Altman-Z score value of 2.97, MMC belongs to the best of the industry, outperforming 94.41% of the companies in the same industry.
MMC has a debt to FCF ratio of 4.24. This is a neutral value as MMC would need 4.24 years to pay back of all of its debts.
MMC's Debt to FCF ratio of 4.24 is on the low side compared to the rest of the industry. MMC is outperformed by 60.14% 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.
With a Debt to Equity ratio value of 1.21, MMC is not doing good in the industry: 88.11% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.21 | ||
| Debt/FCF | 4.24 | ||
| Altman-Z | 2.97 |
ROIC/WACC1.55
WACC8.08%
2.3 Liquidity
A Current Ratio of 1.20 indicates that MMC should not have too much problems paying its short term obligations.
The Current ratio of MMC (1.20) is better than 81.82% 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.
MMC has a Quick ratio of 1.20. This is amongst the best in the industry. MMC outperforms 81.82% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.2 | ||
| Quick Ratio | 1.2 |
3. Growth
3.1 Past
MMC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 9.82%, 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 13.56% on average per year.
MMC shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 9.18%.
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 Y9.88%
EPS Next 2Y9.29%
EPS Next 3Y9.31%
EPS Next 5Y9.82%
Revenue Next Year11%
Revenue Next 2Y8.25%
Revenue Next 3Y7.33%
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.
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 22.33, which indicates a rather expensive current valuation of MMC.
Based on the Price/Earnings ratio, MMC is valued a bit more expensive than 72.03% of the companies in the same industry.
MMC's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 26.87.
With a Price/Forward Earnings ratio of 19.71, MMC is valued on the expensive side.
Based on the Price/Forward Earnings ratio, MMC is valued a bit more expensive than the industry average as 68.53% of the companies are valued more cheaply.
The average S&P500 Price/Forward Earnings ratio is at 35.34. MMC is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.33 | ||
| Fwd PE | 19.71 |
4.2 Price Multiples
MMC's Enterprise Value to EBITDA is on the same level as the industry average.
65.03% of the companies in the same industry are cheaper than MMC, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.89 | ||
| EV/EBITDA | 16.21 |
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.
MMC has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.26
PEG (5Y)1.65
EPS Next 2Y9.29%
EPS Next 3Y9.31%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.74%, MMC has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.68, MMC has a dividend in line with its industry peers.
Compared to the average S&P500 Dividend Yield of 2.36, MMC is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.74% |
5.2 History
The dividend of MMC is nicely growing with an annual growth rate of 11.74%!
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)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.
MMC's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP39.18%
EPS Next 2Y9.29%
EPS Next 3Y9.31%
207.21
+0.22 (+0.11%)
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 Change3.34%
Market Cap101.87B
Analysts65
Price Target235.05 (13.44%)
Short Float %1.17%
Short Ratio2.52
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.74% |
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)-1.82%
PT rev (3m)-2.07%
EPS NQ rev (1m)-0.42%
EPS NQ rev (3m)-1.58%
EPS NY rev (1m)0%
EPS NY rev (3m)0.05%
Revenue NQ rev (1m)-0.08%
Revenue NQ rev (3m)0.44%
Revenue NY rev (1m)0.14%
Revenue NY rev (3m)0.25%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.33 | ||
| Fwd PE | 19.71 | ||
| P/S | 3.95 | ||
| P/FCF | 21.89 | ||
| P/OCF | 20.72 | ||
| P/B | 6.46 | ||
| P/tB | N/A | ||
| EV/EBITDA | 16.21 |
EPS(TTM)9.28
EY4.48%
EPS(NY)10.51
Fwd EY5.07%
FCF(TTM)9.47
FCFY4.57%
OCF(TTM)10
OCFY4.83%
SpS52.48
BVpS32.07
TBVpS-26.28
PEG (NY)2.26
PEG (5Y)1.65
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 | 2.97 |
F-Score5
WACC8.08%
ROIC/WACC1.55
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 Y9.88%
EPS Next 2Y9.29%
EPS Next 3Y9.31%
EPS Next 5Y9.82%
Revenue 1Y (TTM)9.18%
Revenue growth 3Y7.26%
Revenue growth 5Y7.99%
Sales Q2Q%12.1%
Revenue Next Year11%
Revenue Next 2Y8.25%
Revenue Next 3Y7.33%
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%