Marsh & McLennan Companies Inc

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MMC : NYSE : Financial
$65.78 -0.77 | -1.20%
Today's Range: 65.68 - 66.48
Avg. Daily Volume: 2,091,000
07/29/16 - 3:59 PM ET

Financial Analysis


MARSH & MCLENNAN COS's gross profit margin for the second quarter of its fiscal year 2016 has increased when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. MARSH & MCLENNAN COS has average liquidity. Currently, the Quick Ratio is 1.34 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has remained virtually unchanged only decreasing by 1.14% from the same quarter last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face financial difficulties in the near future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)3376.03225.0
EBITDA ($mil)845.0747.0
EBIT ($mil)735.0644.0
Net Income ($mil)472.0419.0


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)974.0930.0
Total Assets ($mil)18076.017413.0
Total Debt ($mil)4757.03936.0
Equity ($mil)6705.06783.0


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin25.0323.16
EBITDA Margin25.0223.16
Operating Margin21.7719.97
Sales Turnover0.730.74
Return on Assets9.138.56
Return on Equity24.5721.61
Debt Q2 FY16 Q2 FY15
Current Ratio1.411.65
Debt/Capital0.420.37
Interest Expense48.040.0
Interest Coverage15.3116.1


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)519.0531.37
Div / share0.310.28
EPS0.90.77
Book value / share12.9212.77
Institutional Own % n/a n/a
Avg Daily Volume2098773.02083084.0

Valuation


BUY. This stock's P/E ratio indicates a premium compared to an average of 16.56 for the Insurance industry and a discount compared to the S&P 500 average of 25.11. For additional comparison, its price-to-book ratio of 5.15 indicates a significant premium versus the S&P 500 average of 2.81 and a significant premium versus the industry average of 1.54. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, MARSH & MCLENNAN COS proves to trade at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
MMC 21.33 Peers 16.56   MMC NA Peers 13.11

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

MMC is trading at a significant premium to its peers.

 

Neutral. The P/CF ratio is the stock’s price divided by the sum of the company's cash flow from operations. It is useful for comparing companies with different capital requirements or financing structures.

Ratio not available.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
MMC 17.75 Peers 14.86   MMC 1.59 Peers 1.30

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

MMC is trading at a significant premium to its peers.

 

Premium. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

MMC trades at a premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
MMC 5.15 Peers 1.54   MMC 16.41 Peers -11.65

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

MMC is trading at a significant premium to its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

MMC is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
MMC 2.63 Peers 1.44   MMC 2.34 Peers -2.14

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

MMC is trading at a significant premium to its industry.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

MMC has a sales growth rate that significantly exceeds its peers.

 

 

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