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Riding on a steady growth momentum, shares of Marsh & McLennan Cos. (MMC - Analyst Report) hit a new 52-week high of $48.83 on Jan 21. This insurance and brokerage service provider’s shares have escalated a whopping 40% since the beginning of 2013.

Moreover, shares of Marsh & McLennan steadily rose about 5% alone after the company reported its third-quarter 2013 results in the beginning of Nov 2013. The company also delivered positive earnings surprise in all of the last 4 quarters, with an average beat of 3.6%. The encouraging momentum of this Zacks Rank #2 (Buy) stock is fuelled by improved core growth coupled with a strong competitive position.

Yesterday’s closing price represents a robust one-year return of about 38.9% against a return of 25.7% clocked by the S&P 500 index. Average volume of shares traded over the last three months stands at approximately 1,812.3K.

Earnings Review

On Nov 6, Marsh & McLennan reported third-quarter operating earnings per share of 46 cents, which were in line with the Zacks Consensus Estimate. However, results outpaced the year-ago quarter number of 39 cents.

Results reflected about 20% growth in operating net income, driven by an improved top line and disciplined expense management. Robust growth was also witnessed within Latin America, Asia-Pacific and EMEA. Overall, top-line growth was achieved across all the segments. Consequently, adjusted operating margin improved to 14.1% from 12.6% in the year-ago period.

Rationale

Marsh & McLennan benefits from global acquisitions that generate new clients and trigger growth. Moreover, steady earnings growth, low capital requirement and financial flexibility continue to support capital deployment effectively.While the company repurchased $230 million shares during 2012, another $400 million were bought back in the first nine months of 2013 itself, boosting shareholder confidence.

Overall, we believe the upcoming quarters should benefit from improved pricing, stable ratings and other macro factors. Even the estimated long-term earnings growth for Marsh & McLennan is pegged at a decent 12.1%, in line with the peer group average.

Some other top-ranked insurers that warrant a look are Prudential Plc (PUK - Snapshot Report), Primerica Inc. (PRI - Snapshot Report) and Kemper Corp. (KMPR - Snapshot Report). All these stocks sport a Zacks Rank #1 (Strong Buy).

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