MARSH & MCLENNAN COS (MMC)
US5717481023 - Common Stock
We assign a fundamental rating of 6 out of 10 to MMC. MMC was compared to 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. MMC is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year MMC was profitable.
In the past year MMC had a positive cash flow from operations.
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
MMC has a Return On Assets of 8.25%. This is amongst the best in the industry. MMC outperforms 98.57% of its industry peers.
MMC has a Return On Equity of 30.01%. This is amongst the best in the industry. MMC outperforms 98.57% of its industry peers.
MMC has a Return On Invested Capital of 14.79%. This is amongst the best in the industry. MMC outperforms 98.57% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for MMC is significantly above the industry average of 3.96%.
The last Return On Invested Capital (14.79%) for MMC is above the 3 year average (13.51%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.25% | ||
| ROE | 30.01% | ||
| ROIC | 14.79% |
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
Looking at the Profit Margin, with a value of 16.97%, MMC belongs to the top of the industry, outperforming 80.71% of the companies in the same industry.
MMC's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 25.22%, MMC belongs to the top of the industry, outperforming 87.86% 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 | 25.22% | ||
| PM (TTM) | 16.97% | ||
| 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
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 has been reduced 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 3.49. This indicates that MMC is financially healthy and has little risk of bankruptcy at the moment.
MMC's Altman-Z score of 3.49 is amongst the best of the industry. MMC outperforms 96.43% of its industry peers.
MMC has a debt to FCF ratio of 3.73. This is a good value and a sign of high solvency as MMC would need 3.73 years to pay back of all of its debts.
MMC has a Debt to FCF ratio (3.73) which is in line with its industry peers.
MMC has a Debt/Equity ratio of 0.97. This is a neutral value indicating MMC is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.97, MMC is doing worse than 85.71% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.97 | ||
| Debt/FCF | 3.73 | ||
| Altman-Z | 3.49 |
ROIC/WACC1.78
WACC8.3%
2.3 Liquidity
MMC has a Current Ratio of 1.17. 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 Current ratio of 1.17. This is amongst the best in the industry. MMC outperforms 83.57% of its industry peers.
MMC has a Quick Ratio of 1.17. 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 (1.17) than 83.57% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.17 | ||
| Quick Ratio | 1.17 |
3. Growth
3.1 Past
MMC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 14.50%, 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 12.62% yearly.
The Revenue has grown by 9.44% in the past year. This is quite good.
The Revenue has been growing by 8.75% on average over the past years. This is quite good.
EPS 1Y (TTM)14.5%
EPS 3Y16.61%
EPS 5Y12.62%
EPS Q2Q%9.55%
Revenue 1Y (TTM)9.44%
Revenue growth 3Y9.7%
Revenue growth 5Y8.75%
Sales Q2Q%5.87%
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 5.02% on average over the next years.
EPS Next Y11.92%
EPS Next 2Y10.3%
EPS Next 3Y10.06%
EPS Next 5Y9.82%
Revenue Next Year7.45%
Revenue Next 2Y6.61%
Revenue Next 3Y6.23%
Revenue Next 5Y5.02%
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
A Price/Earnings ratio of 25.80 indicates a quite expensive valuation of MMC.
Compared to the rest of the industry, the Price/Earnings ratio of MMC indicates a slightly more expensive valuation: MMC is more expensive than 66.43% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of MMC to the average of the S&P500 Index (24.41), we can say MMC is valued inline with the index average.
MMC is valuated rather expensively with a Price/Forward Earnings ratio of 22.74.
Based on the Price/Forward Earnings ratio, MMC is valued a bit more expensive than 71.43% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.59, MMC is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.8 | ||
| Fwd PE | 22.74 |
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 67.86% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.59 | ||
| EV/EBITDA | 17.58 |
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)2.16
PEG (5Y)2.04
EPS Next 2Y10.3%
EPS Next 3Y10.06%
5. Dividend
5.1 Amount
MMC has a Yearly Dividend Yield of 1.50%. Purely for dividend investing, there may be better candidates out there.
MMC's Dividend Yield is comparable with the industry average which is at 4.81.
MMC's Dividend Yield is slightly below the S&P500 average, which is at 2.30.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.5% |
5.2 History
On average, the dividend of MMC grows each year by 10.54%, 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)10.54%
Div Incr Years14
Div Non Decr Years18
5.3 Sustainability
35.23% 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.
DP35.23%
EPS Next 2Y10.3%
EPS Next 3Y10.06%
MARSH & MCLENNAN COS
NYSE:MMC (7/26/2024, 7:04:00 PM)
After market: 217.97 0 (0%)217.97
+1.91 (+0.88%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap107.40B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.5% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(4)
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EPS beat(8)
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EPS beat(12)
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EPS beat(16)
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Revenue beat(2)
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Min 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 | 25.8 | ||
| Fwd PE | 22.74 | ||
| 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)2.16
PEG (5Y)2.04
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.25% | ||
| ROE | 30.01% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 25.22% | ||
| PM (TTM) | 16.97% | ||
| 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 Turnover0.49
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.97 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.17 | ||
| Quick Ratio | 1.17 | ||
| 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)14.5%
EPS 3Y16.61%
EPS 5Y
EPS Q2Q%
EPS Next Y11.92%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)9.44%
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