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Marsh & McLennan Companies Inc MMC

Morningstar Rating
$218.21 −0.82 (0.37%)
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Company Report

Marsh McLennan Earnings: Another Strong Quarter, but Growth Slows a Bit

Narrow-moat Marsh McLennan delivered another set of strong results, with organic year-over-year revenue growth of 6% for its second quarter. This is a bit of a contraction from the rates we have seen recently, but growth remains modestly above our long-term expectations. We will maintain our $167 fair value estimate and see the shares as materially overvalued. While we appreciate the recent strength the company has shown, we think long-term growth prospects are modest and the market is overly focused on recent results.

Price vs Fair Value

MMC is trading within a range we consider fairly valued.
Price
$219.04
Fair Value
$932.00
Uncertainty
Medium
1-Star Price
$252.55
5-Star Price
$234.50
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Relatively steady revenue and a flexible cost structure, combined with limited capital requirements, make Marsh McLennan a reliable producer of strong free cash flow.

Bears

Marsh McLennan is exposed to the insurance pricing cycle.

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News

Trading Information

Previous Close Price
$219.03
Day Range
$217.26220.55
52-Week Range
$184.02221.70
Bid/Ask
$218.14 / $218.23
Market Cap
$107.37 Bil
Volume/Avg
534,419 / 1.6 Mil

Key Statistics

Price/Earnings (Normalized)
25.62
Price/Sales
4.62
Dividend Yield (Trailing)
1.30%
Dividend Yield (Forward)
1.49%
Total Yield
2.17%

Company Profile

Marsh McLennan is a professional services firm that provides advice and solutions in the areas of risk, strategy, and human capital. The company operates through two main segments: risk and insurance services and consulting. In risk and insurance services, the firm offers services via Marsh (an insurance broker) and Guy Carpenter (a risk and reinsurance specialist). The consulting division comprises Mercer (a provider of human resource services) and Oliver Wyman (a management and economic consultancy). About half of its revenue is generated outside the U.S.
Sector
Financial Services
Industry
Insurance Brokers
Stock Style Box
Large Core
Total Number of Employees

Competitors

Valuation

Metric
MMC
WTW
TRV
Price/Earnings (Normalized)
25.6217.7412.90
Price/Book Value
8.062.871.91
Price/Sales
4.622.921.09
Price/Cash Flow
20.3816.494.33
Price/Earnings
MMC
WTW
TRV

Financial Strength

Metric
MMC
WTW
TRV
Quick Ratio
0.500.33
Current Ratio
1.171.12
Interest Coverage
9.696.1612.52
Quick Ratio
MMC
WTW
TRV

Profitability

Metric
MMC
WTW
TRV
Return on Assets (Normalized)
8.90%5.32%3.02%
Return on Equity (Normalized)
34.66%16.26%16.15%
Return on Invested Capital (Normalized)
16.70%11.25%13.04%
Return on Assets
MMC
WTW
TRV
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