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 has a great profitability rating, 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
The Return On Assets of MMC (7.09%) is better than 94.41% of its industry peers.
With an excellent Return On Equity value of 28.73%, MMC belongs to the best of the industry, outperforming 95.10% of the companies in the same industry.
MMC has a better Return On Invested Capital (12.51%) 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 4.27%.
| 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 has a Profit Margin of 16.13%. This is amongst the best in the industry. MMC outperforms 85.31% of its industry peers.
MMC's Profit Margin has improved in the last couple of years.
MMC's Operating Margin of 25.36% is amongst the best of the industry. MMC outperforms 89.51% of its industry peers.
MMC's Operating Margin has improved in the last couple of years.
| 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.
Compared to 1 year ago, MMC has about the same amount of shares outstanding.
Compared to 5 years ago, MMC has less shares outstanding
The debt/assets ratio for MMC is higher compared to a year ago.
2.2 Solvency
MMC has an Altman-Z score of 3.09. This indicates that MMC is financially healthy and has little risk of bankruptcy at the moment.
MMC has a Altman-Z score of 3.09. This is amongst the best in the industry. MMC outperforms 95.10% of its industry peers.
The Debt to FCF ratio of MMC is 4.91, which is a neutral value as it means it would take MMC, 4.91 years of fcf income to pay off all of its debts.
MMC has a worse Debt to FCF ratio (4.91) than 67.13% of its industry peers.
MMC has a Debt/Equity ratio of 1.42. This is a high value indicating a heavy dependency on external financing.
MMC has a worse Debt to Equity ratio (1.42) than 90.21% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.42 | ||
| Debt/FCF | 4.91 | ||
| Altman-Z | 3.09 |
ROIC/WACC1.51
WACC8.28%
2.3 Liquidity
A Current Ratio of 1.14 indicates that MMC should not have too much problems paying its short term obligations.
MMC's Current ratio of 1.14 is amongst the best of the industry. MMC outperforms 80.42% of its industry peers.
A Quick Ratio of 1.14 indicates that MMC should not have too much problems paying its short term obligations.
Looking at the Quick 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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.14 | ||
| Quick Ratio | 1.14 |
3. Growth
3.1 Past
MMC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 8.86%, 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 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
The Earnings Per Share is expected to grow by 9.82% on average over the next years. This is quite good.
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 Y9.82%
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
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
A Price/Earnings ratio of 25.73 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 71.33% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of MMC to the average of the S&P500 Index (26.60), we can say MMC is valued inline with the index average.
Based on the Price/Forward Earnings ratio of 21.99, the valuation of MMC can be described as rather expensive.
Based on the Price/Forward Earnings ratio, MMC is valued a bit more expensive than the industry average as 72.03% of the companies are valued more cheaply.
When comparing the Price/Forward Earnings ratio of MMC to the average of the S&P500 Index (22.43), we can say MMC is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.73 | ||
| Fwd PE | 21.99 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MMC indicates a slightly more expensive valuation: MMC is more expensive than 62.24% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, MMC is valued a bit more expensive than the industry average as 72.03% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.23 | ||
| EV/EBITDA | 18.44 |
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)2.62
PEG (5Y)1.9
EPS Next 2Y9.22%
EPS Next 3Y9.27%
5. Dividend
5.1 Amount
MMC has a Yearly Dividend Yield of 1.43%. Purely for dividend investing, there may be better candidates out there.
MMC's Dividend Yield is comparable with the industry average which is at 3.17.
Compared to the average S&P500 Dividend Yield of 2.36, MMC is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.43% |
5.2 History
On average, the dividend of MMC grows each year by 11.75%, 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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
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.
The dividend of MMC is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP38.7%
EPS Next 2Y9.22%
EPS Next 3Y9.27%
230.81
-1.03 (-0.44%)
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 Cap113.73B
Analysts65.6
Price Target240.01 (3.99%)
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 | 25.73 | ||
| Fwd PE | 21.99 | ||
| P/S | 4.54 | ||
| P/FCF | 27.23 | ||
| P/OCF | 25.49 | ||
| P/B | 8.09 | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.44 |
EPS(TTM)8.97
EY3.89%
EPS(NY)10.5
Fwd EY4.55%
FCF(TTM)8.48
FCFY3.67%
OCF(TTM)9.05
OCFY3.92%
SpS50.83
BVpS28.55
TBVpS-28.84
PEG (NY)2.62
PEG (5Y)1.9
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 | 3.09 |
F-Score4
WACC8.28%
ROIC/WACC1.51
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%