Yahoo Finance Here's Why Investors Should Hold Marsh & McLennan (MMC) Stock
Marsh & McLennan Companies, Inc. MMC is well-poised for growth on the back of robust segmental contributions, solid renewal rates, frequent acquisitions and adequate cash reserves.
Zacks Rank & Price Rally
Marsh & McLennan currently carries a Zacks Rank #3 (Hold).
The stock has gained 6.6% year to date compared with the industry's 3.9% growth. The Zacks Finance sector and the S&P 500 composite have risen 0.8% and 12.7%, respectively, in the said time frame.
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Robust Growth Prospects
The Zacks Consensus Estimate for Marsh & McLennan’s 2023 earnings is pegged at $7.60 per share, indicating a 11% increase from the year-ago reported figure. The same for revenues stands at $22.1 billion, implying 6.7% growth from the prior-year number.
The consensus estimate for 2024 earnings is pegged at $8.24 per share, suggesting 8.5% growth from the year-ago estimate. The same for revenues stands at $23.3 billion, which indicates a rise of 5.3% from the prior-year estimate.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2023 earnings has been revised upward 0.5% in the past 30 days.
Robust Earnings Surprise History
MMC boasts an impressive surprise history. Its earnings outpaced estimates in each of the trailing four quarters, the average surprise being 2.90%.
Solid Return on Equity
The return on equity for Marsh & McLennan currently stands at 33.3%, which is higher than the industry’s average of 32%. The figure substantiates the company’s efficiency in utilizing shareholders’ funds.
Business Tailwinds
The top line of Marsh & McLennan is aided by strong performances of the Risk and Insurance Services and, Consulting segments. Its revenues have consistently grown since 2010 except for in 2015. Management expects to generate mid-single-digit or higher underlying revenue growth in 2023.
Higher renewal rates and growth exposure coupled with increased insurance and reinsurance rates drive the Risk and Insurance Services segment, while the Consulting unit benefits on the back of higher underlying growth in career and health.
Marsh & McLennan follows an active inorganic growth strategy throughout the year. MMC makes frequent acquisitions within its different operating units that enable it to foray into new regions, explore deep within the existing ones, delve into new businesses and specialize within its existing businesses. After expending $572 million on acquisitions in 2022, MMC remains quite active on the buyout front so far this year.
Some of the recent buyouts conducted by the different operating units of Marsh & McLennan remain that of SOLV Risk Solutions and Re Solutions.
To pursue such uninterrupted growth-related initiatives, a solid financial position is a dire need. Marsh & McLennan comprises sound cash reserves. A commendable financial stand also provides the ground for MMC to pursue a disciplined capital management strategy through share buybacks and dividend payments. MMC has been hiking dividends for 13 straight years. Its dividend yield of 1.3% remains higher than the industry average of 1.1%.
Stocks to Consider
Some better-ranked stocks in the insurance space are Assurant, Inc. AIZ, Brown & Brown, Inc. BRO and Ryan Specialty Holdings, Inc. RYAN. Assurant sports a Zacks Rank #1 (Strong Buy), and Brown & Brown and Ryan Specialty carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Assurant’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters and missed the mark once, the average beat being 18.18%. The consensus estimate for AIZ’s 2023 earnings suggests an improvement of 25%, while the same for revenues indicates growth of 2.7% from the respective year-ago estimates.
The consensus mark for AIZ’s 2023 earnings has moved 20.2% north in the past seven days. Shares of Assurant have declined 1.3% year to date.
Brown & Brown’s earnings surpassed estimates in three of the last four quarters and missed the mark once, the average surprise being 1.19%. The Zacks Consensus Estimate for BRO’s 2023 earnings indicates a 10.5% rise, while the same for revenues suggests an improvement of 13.2% from the respective prior-year estimates.
The consensus mark for BRO’s 2023 earnings has moved 2.4% north in the past 60 days. Shares of Brown & Brown have gained 12% year to date.
Ryan Specialty’s earnings outpaced estimates in two of the trailing four quarters, missed the mark once and matched the same in the remaining one occasion, the average surprise being 2.67%. The Zacks Consensus Estimate for RYAN’s 2023 earnings indicates an 15.7% rise, while the same for revenues suggests an improvement of 17% from the respective prior-year estimates.
The consensus mark for RYAN’s 2023 earnings has moved up 2.3% in the past 30 days. Shares of Ryan Specialty have inched up 0.9% year to date.
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Assurant, Inc. (AIZ) : Free Stock Analysis Report
Marsh & McLennan Companies, Inc. (MMC) : Free Stock Analysis Report
Brown & Brown, Inc. (BRO) : Free Stock Analysis Report
Ryan Specialty Holdings Inc. (RYAN) : Free Stock Analysis Report
