Marsh & McLennan Companies, Inc.
Marsh & McLennan Companies, Inc. Fundamental Analysis
Marsh & McLennan Companies, Inc. (MMC) shows strong financial fundamentals with a PE ratio of 21.39, profit margin of 15.42%, and ROE of 27.60%. The company generates $27.2B in annual revenue with strong year-over-year growth of 10.32%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 68.4/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze MMC's fundamental strength across five key dimensions:
Efficiency Score
WeakMMC struggles to generate sufficient returns from assets.
Valuation Score
ModerateMMC shows balanced valuation metrics.
Growth Score
ModerateMMC shows steady but slowing expansion.
Financial Health Score
ModerateMMC shows balanced financial health with some risks.
Profitability Score
ExcellentMMC achieves industry-leading margins.
Key Financial Metrics
Is MMC Expensive or Cheap?
P/E Ratio
MMC trades at 21.39 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, MMC's PEG of 19.94 indicates potential overvaluation.
Price to Book
The market values Marsh & McLennan Companies, Inc. at 5.81 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 10.10 times EBITDA. This signals the market has high growth expectations.
How Well Does MMC Make Money?
Net Profit Margin
For every $100 in sales, Marsh & McLennan Companies, Inc. keeps $15.42 as profit after all expenses.
Operating Margin
Core operations generate 23.06 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $27.60 in profit for every $100 of shareholder equity.
ROA
Marsh & McLennan Companies, Inc. generates $7.09 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Marsh & McLennan Companies, Inc. produces operating cash flow of $5.39B, showing steady but balanced cash generation.
Free Cash Flow
Marsh & McLennan Companies, Inc. generates strong free cash flow of $5.16B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $10.50 in free cash annually.
FCF Yield
MMC converts 5.69% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
21.39
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
19.94
vs 25 benchmark
P/B Ratio
Price to book value ratio
5.81
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.33
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.40
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.10
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.28
vs 25 benchmark
ROA
Return on assets percentage
0.07
vs 25 benchmark
ROCE
Return on capital employed
0.17
vs 25 benchmark
How MMC Stacks Against Its Sector Peers
| Metric | MMC Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 21.39 | 18.86 | Worse (Expensive) |
| ROE | 27.60% | 847.00% | Weak |
| Net Margin | 15.42% | 4202.00% | Weak |
| Debt/Equity | 1.40 | 0.91 | Weak (High Leverage) |
| Current Ratio | 1.10 | 667.17 | Neutral |
| ROA | 7.09% | -21543.00% (disorted) | Weak |
MMC outperforms its industry in 0 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Marsh & McLennan Companies, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
61.43%
Industry Style: Value, Dividend, Cyclical
High GrowthEPS CAGR
112.65%
Industry Style: Value, Dividend, Cyclical
High GrowthFCF CAGR
61.26%
Industry Style: Value, Dividend, Cyclical
High Growth