MARSH & MCLENNAN COS (MMC)

US5717481023 - Common Stock

206.21  +0.6 (+0.29%)

Fundamental Rating

6

MMC gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 140 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.



8

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.
MMC had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

The Return On Assets of MMC (7.82%) is better than 94.96% of its industry peers.
The Return On Equity of MMC (30.81%) is better than 97.84% of its industry peers.
MMC has a Return On Invested Capital of 14.96%. This is amongst the best in the industry. MMC outperforms 98.56% of its industry peers.
The Average Return On Invested Capital over the past 3 years for MMC is significantly above the industry average of 4.02%.
The last Return On Invested Capital (14.96%) for MMC is above the 3 year average (13.51%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA 7.82%
ROE 30.81%
ROIC 14.96%
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

With a decent Profit Margin value of 16.52%, MMC is doing good in the industry, outperforming 79.86% of the companies in the same industry.
MMC's Profit Margin has improved in the last couple of years.
The Operating Margin of MMC (24.56%) is better than 85.61% of its industry peers.
In the last couple of years the Operating Margin of MMC has grown nicely.
Industry RankSector Rank
OM 24.56%
PM (TTM) 16.52%
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

6

2. Health

2.1 Basic Checks

MMC has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
MMC has less shares outstanding than it did 1 year ago.
The number of shares outstanding for MMC has been reduced compared to 5 years ago.
Compared to 1 year ago, MMC has a worse debt to assets ratio.

2.2 Solvency

MMC has an Altman-Z score of 3.26. This indicates that MMC is financially healthy and has little risk of bankruptcy at the moment.
MMC's Altman-Z score of 3.26 is amongst the best of the industry. MMC outperforms 96.40% of its industry peers.
The Debt to FCF ratio of MMC is 3.52, which is a good value as it means it would take MMC, 3.52 years of fcf income to pay off all of its debts.
MMC has a Debt to FCF ratio (3.52) which is comparable to the rest of the industry.
A Debt/Equity ratio of 0.97 indicates that MMC is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.97, MMC is not doing good in the industry: 85.61% of the companies in the same industry are doing better.
Industry RankSector Rank
Debt/Equity 0.97
Debt/FCF 3.52
Altman-Z 3.26
ROIC/WACC1.82
WACC8.24%

2.3 Liquidity

MMC has a Current Ratio of 1.10. This is a normal value and indicates that MMC is financially healthy and should not expect problems in meeting its short term obligations.
MMC's Current ratio of 1.10 is amongst the best of the industry. MMC outperforms 82.01% of its industry peers.
MMC has a Quick Ratio of 1.10. This is a normal value and indicates that MMC is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of MMC (1.10) is better than 82.01% of its industry peers.
Industry RankSector Rank
Current Ratio 1.1
Quick Ratio 1.1

5

3. Growth

3.1 Past

MMC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 15.20%, 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 9.73% in the past year. This is quite good.
MMC shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 8.75% yearly.
EPS 1Y (TTM)15.2%
EPS 3Y16.61%
EPS 5Y12.62%
EPS growth Q2Q14.29%
Revenue 1Y (TTM)9.73%
Revenue growth 3Y9.7%
Revenue growth 5Y8.75%
Revenue growth Q2Q10.59%

3.2 Future

MMC is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.86% yearly.
The Revenue is expected to grow by 4.39% on average over the next years.
EPS Next Y10.52%
EPS Next 2Y9.99%
EPS Next 3Y9.83%
EPS Next 5Y7.86%
Revenue Next Year6.96%
Revenue Next 2Y6.34%
Revenue Next 3Y6.07%
Revenue Next 5Y4.39%

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.

2

4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 26.17 indicates a quite expensive valuation of MMC.
65.47% 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 (26.42), we can say MMC is valued inline with the index average.
A Price/Forward Earnings ratio of 23.68 indicates a rather expensive valuation of MMC.
Based on the Price/Forward Earnings ratio, MMC is valued a bit more expensive than 68.35% of the companies in the same industry.
MMC's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.74.
Industry RankSector Rank
PE 26.17
Fwd PE 23.68

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MMC is on the same level as its industry peers.
62.59% of the companies in the same industry are cheaper than MMC, based on the Price/Free Cash Flow ratio.
Industry RankSector Rank
P/FCF 26.51
EV/EBITDA 17.66

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
MMC has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.49
PEG (5Y)2.07
EPS Next 2Y9.99%
EPS Next 3Y9.83%

5

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 1.38%, MMC has a reasonable but not impressive dividend return.
MMC's Dividend Yield is comparable with the industry average which is at 4.13.
Compared to an average S&P500 Dividend Yield of 2.34, MMC's dividend is way lower than the S&P500 average.
Industry RankSector Rank
Dividend Yield 1.38%

5.2 History

On average, the dividend of MMC grows each year by 10.54%, which is quite nice.
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)10.54%
Div Incr Years14
Div Non Decr Years18

5.3 Sustainability

MMC pays out 34.56% of its income as dividend. This is a sustainable payout ratio.
The dividend of MMC is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP34.56%
EPS Next 2Y9.99%
EPS Next 3Y9.83%

MARSH & MCLENNAN COS

NYSE:MMC (3/28/2024, 12:41:23 PM)

206.21

+0.6 (+0.29%)

Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap101.39B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 1.38%
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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Revenue beat(2)
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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 RankSector Rank
PE 26.17
Fwd PE 23.68
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)2.49
PEG (5Y)2.07
Profitability
Industry RankSector Rank
ROA 7.82%
ROE 30.81%
ROCE
ROIC
ROICexc
ROICexgc
OM 24.56%
PM (TTM) 16.52%
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 Turnover0.47
Health
Industry RankSector Rank
Debt/Equity 0.97
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 1.1
Quick Ratio 1.1
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)
Growth
EPS 1Y (TTM)15.2%
EPS 3Y16.61%
EPS 5Y
EPS growth Q2Q
EPS Next Y10.52%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)9.73%
Revenue growth 3Y9.7%
Revenue growth 5Y
Revenue growth 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