MARSH & MCLENNAN COS (MMC) Stock Fundamental Analysis
NYSE:MMC - New York Stock Exchange, Inc. - US5717481023 - Common Stock - Currency: USD
MMC gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 143 industry peers in the Insurance industry. MMC has an excellent profitability rating, 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.
In the past year MMC had a positive cash flow from operations.
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
MMC has a Return On Assets of 7.09%. This is amongst the best in the industry. MMC outperforms 94.41% of its industry peers.
MMC's Return On Equity of 28.73% is amongst the best of the industry. MMC outperforms 95.10% of its industry peers.
MMC has a Return On Invested Capital of 12.51%. This is amongst the best in the industry. MMC outperforms 98.60% of its industry peers.
MMC had an Average Return On Invested Capital over the past 3 years of 13.69%. This is significantly above the industry average of 4.27%.
| 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's Profit Margin of 16.13% 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 better Operating Margin (25.36%) than 89.51% of its industry peers.
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
MMC has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is 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
Compared to 1 year ago, MMC has a worse debt to assets ratio.
2.2 Solvency
MMC has an Altman-Z score of 3.07. This indicates that MMC is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 3.07, MMC belongs to the best of the industry, outperforming 95.10% of the companies in the same industry.
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.
The Debt to FCF ratio of MMC (4.91) is worse than 67.13% 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.
The Debt to Equity ratio of MMC (1.42) is worse than 90.21% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.42 | ||
| Debt/FCF | 4.91 | ||
| Altman-Z | 3.07 |
ROIC/WACC1.5
WACC8.34%
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.
Looking at the Current ratio, with a value of 1.14, MMC belongs to the top of the industry, outperforming 80.42% of the companies in the same industry.
A Quick Ratio of 1.14 indicates that MMC should not have too much problems paying its short term obligations.
With an excellent Quick ratio value of 1.14, MMC belongs to the best of the industry, outperforming 80.42% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.14 | ||
| Quick Ratio | 1.14 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 8.86% 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 small growth in Revenue. The Revenue has grown by 7.56% 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)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
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.
The Revenue is expected to grow by 6.03% on average over the next years.
EPS Next Y9.82%
EPS Next 2Y9.22%
EPS Next 3Y9.27%
EPS Next 5Y9.82%
Revenue Next Year10.72%
Revenue Next 2Y8.17%
Revenue Next 3Y7.2%
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
MMC is valuated quite expensively with a Price/Earnings ratio of 25.57.
71.33% of the companies in the same industry are cheaper than MMC, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of MMC to the average of the S&P500 Index (25.82), we can say MMC is valued inline with the index average.
MMC is valuated rather expensively with a Price/Forward Earnings ratio of 21.85.
Based on the Price/Forward Earnings ratio, MMC is valued a bit more expensive than 72.03% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.76. MMC is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.57 | ||
| Fwd PE | 21.85 |
4.2 Price Multiples
MMC's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. MMC is more expensive than 62.24% 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 72.03% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.05 | ||
| EV/EBITDA | 18.28 |
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)2.6
PEG (5Y)1.89
EPS Next 2Y9.22%
EPS Next 3Y9.27%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.43%, MMC has a reasonable but not impressive dividend return.
MMC's Dividend Yield is comparable with the industry average which is at 3.18.
MMC's Dividend Yield is slightly below the S&P500 average, which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.43% |
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 their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)11.75%
Div Incr Years15
Div Non Decr Years19
5.3 Sustainability
MMC pays out 38.70% of its income as dividend. This is a sustainable payout ratio.
MMC's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP38.7%
EPS Next 2Y9.22%
EPS Next 3Y9.27%
229.33
+0.86 (+0.38%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners91.98%
Inst Owner Change0.92%
Ins Owners0.07%
Ins Owner Change3.66%
Market Cap113.00B
Analysts65.6
Price Target240.01 (4.66%)
Short Float %1.23%
Short Ratio2.64
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.43% |
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)-1.16%
PT rev (3m)1.85%
EPS NQ rev (1m)-0.13%
EPS NQ rev (3m)-0.94%
EPS NY rev (1m)-0.05%
EPS NY rev (3m)-0.72%
Revenue NQ rev (1m)0.06%
Revenue NQ rev (3m)0.17%
Revenue NY rev (1m)0.15%
Revenue NY rev (3m)0.34%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.57 | ||
| Fwd PE | 21.85 | ||
| P/S | 4.51 | ||
| P/FCF | 27.05 | ||
| P/OCF | 25.33 | ||
| P/B | 8.03 | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.28 |
EPS(TTM)8.97
EY3.91%
EPS(NY)10.5
Fwd EY4.58%
FCF(TTM)8.48
FCFY3.7%
OCF(TTM)9.05
OCFY3.95%
SpS50.83
BVpS28.55
TBVpS-28.84
PEG (NY)2.6
PEG (5Y)1.89
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 | 3.07 |
F-Score4
WACC8.34%
ROIC/WACC1.5
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 Y9.82%
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 Year10.72%
Revenue Next 2Y8.17%
Revenue Next 3Y7.2%
Revenue Next 5Y6.03%
EBIT growth 1Y10.01%
EBIT growth 3Y12.14%
EBIT growth 5Y15.58%
EBIT Next Year25.79%
EBIT Next 3Y12.82%
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%