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. While MMC belongs to the best of the industry regarding profitability, 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.
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
With an excellent Return On Assets value of 7.05%, MMC belongs to the best of the industry, outperforming 93.71% of the companies in the same industry.
The Return On Equity of MMC (26.17%) is better than 93.71% of its industry peers.
MMC has a better Return On Invested Capital (12.56%) than 98.60% of its industry peers.
The Average Return On Invested Capital over the past 3 years for MMC is significantly above the industry average of 4.08%.
| 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
Looking at the Profit Margin, with a value of 16.00%, MMC belongs to the top of the industry, outperforming 86.71% of the companies in the same industry.
In the last couple of years the Profit Margin of MMC has grown nicely.
MMC has a better Operating Margin (25.39%) than 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), MMC is creating some value.
The number of shares outstanding for MMC remains at a similar level compared to 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 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.
The Altman-Z score of MMC (2.97) is better than 93.01% of its industry peers.
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's Debt to FCF ratio of 4.24 is on the low side compared to the rest of the industry. MMC is outperformed by 61.54% of its industry peers.
A Debt/Equity ratio of 1.21 is on the high side and indicates that MMC has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 1.21, MMC is doing worse than 87.41% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.21 | ||
| Debt/FCF | 4.24 | ||
| Altman-Z | 2.97 |
ROIC/WACC1.54
WACC8.18%
2.3 Liquidity
A Current Ratio of 1.20 indicates that MMC should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.20, MMC belongs to the top of the industry, outperforming 83.92% of the companies in the same industry.
A Quick Ratio of 1.20 indicates that MMC should not have too much problems paying its short term obligations.
The Quick ratio of MMC (1.20) is better than 83.92% 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
The Earnings Per Share is expected to grow by 9.82% on average over the next years. This is quite good.
MMC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.03% yearly.
EPS Next Y9.88%
EPS Next 2Y9.29%
EPS Next 3Y9.31%
EPS Next 5Y9.82%
Revenue Next Year10.84%
Revenue Next 2Y8.27%
Revenue Next 3Y7.33%
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.
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
With a Price/Earnings ratio of 22.67, MMC is valued on the expensive side.
Based on the Price/Earnings ratio, MMC is valued a bit more expensive than the industry average as 67.83% of the companies are valued more cheaply.
Compared to an average S&P500 Price/Earnings ratio of 28.04, MMC is valued at the same level.
The Price/Forward Earnings ratio is 20.02, which indicates a rather expensive current valuation of MMC.
Compared to the rest of the industry, the Price/Forward Earnings ratio of MMC indicates a slightly more expensive valuation: MMC is more expensive than 70.63% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 37.64. MMC is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.67 | ||
| Fwd PE | 20.02 |
4.2 Price Multiples
60.14% of the companies in the same industry are cheaper than MMC, based on the Enterprise Value to EBITDA ratio.
63.64% 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 | 22.23 | ||
| EV/EBITDA | 16.28 |
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)2.29
PEG (5Y)1.67
EPS Next 2Y9.29%
EPS Next 3Y9.31%
5. Dividend
5.1 Amount
MMC has a Yearly Dividend Yield of 1.72%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.39, MMC has a dividend in line with its industry peers.
Compared to the average S&P500 Dividend Yield of 2.35, MMC is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.72% |
5.2 History
On average, the dividend of MMC grows each year by 11.74%, 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)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%
210.4
+2.08 (+1%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners91.71%
Inst Owner Change0.19%
Ins Owners0.06%
Ins Owner Change3.3%
Market Cap103.44B
Analysts65.6
Price Target237.67 (12.96%)
Short Float %1.4%
Short Ratio3.28
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.72% |
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)-0.97%
PT rev (3m)-2.12%
EPS NQ rev (1m)0.18%
EPS NQ rev (3m)-1.17%
EPS NY rev (1m)0.06%
EPS NY rev (3m)0%
Revenue NQ rev (1m)0.16%
Revenue NQ rev (3m)0.52%
Revenue NY rev (1m)0.12%
Revenue NY rev (3m)0.26%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.67 | ||
| Fwd PE | 20.02 | ||
| P/S | 4.01 | ||
| P/FCF | 22.23 | ||
| P/OCF | 21.04 | ||
| P/B | 6.56 | ||
| P/tB | N/A | ||
| EV/EBITDA | 16.28 |
EPS(TTM)9.28
EY4.41%
EPS(NY)10.51
Fwd EY5%
FCF(TTM)9.47
FCFY4.5%
OCF(TTM)10
OCFY4.75%
SpS52.48
BVpS32.07
TBVpS-26.28
PEG (NY)2.29
PEG (5Y)1.67
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
WACC8.18%
ROIC/WACC1.54
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 Year10.84%
Revenue Next 2Y8.27%
Revenue Next 3Y7.33%
Revenue Next 5Y6.03%
EBIT growth 1Y9.92%
EBIT growth 3Y12.14%
EBIT growth 5Y15.58%
EBIT Next Year23.6%
EBIT Next 3Y12.81%
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%