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Why You Should Hold Marsh & McLennan (MMC) in Your Portfolio
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Marsh & McLennan Companies, Inc. (MMC - Free Report) has been in investors' good books on the back of its strategic initiatives, which led to its business expansion.
Over the past 30 days, the stock has witnessed its earnings estimates for 2020 being revised 4.5% upward, reflecting analysts' optimism on the stock.
It retained investors' favorable sentiment by maintaining its beat streak in all the last four quarters, the average being 8.4%. This, in turn, underlines its operational excellence.
In second-quarter 2020, the company delivered adjusted earnings per share of $1.32, surpassing the Zacks Consensus Estimate by 15.8% on reduced expenses and a solid contribution from its Risk and Insurance Services segment. Moreover, the bottom line increased 11.9% year over year.
The company’s operating efficiency, driven by its diverse product offerings, a wide geographic footprint and strong client retention is worth mentioning. This also contributed to its top line. Revenues have been consistently rising since 2010 (except 2015). 2019 also marks the highest annual revenue growth rate for the company in 20 years. In the first six months of 2020, revenues of $8.8 billion were up 5% (2% on an underlying basis) owing to a strong Risk and Insurances Services Segment.
Acquisitions form one of the core growth strategies at Marsh & McLennan. The company made numerous purchases within its different operating units that enabled it to enter new geographical regions, expand within the existing ones, foray into untapped businesses, develop new segments and specialize within its existing businesses. Its JLT buyout in 2019 enhanced its portfolio. The Risk and Insurance Services segment completed two acquisitions in the first quarter of 2020. In the first six months of this year, the company spent $1.2 billion on buyouts.
Investors should be impressed by its disciplined capital management. In July 2020, its board of directors hiked its quarterly cash dividend by 2.2%, reflecting the 11th consecutive year of dividend increase at Marsh & McLennan. Its current dividend yield of 1.6% is higher than the industry average of 1.3%.
However, the company’s operating expenses escalated over the last several years due to higher compensation and benefits. The same further increased 14.7% and 1.2% in 2019 and during the first six months of 2020, respectively. A persistent escalation of expenses might weigh on the company’s margins.
Other stocks in the same space, such as Brown Brown, Inc. (BRO - Free Report) , Aon plc (AON - Free Report) and Arthur J. Gallagher Co. (AJG - Free Report) have returned 29%, 3.9% and 21.3%, respectively, in the same time frame.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
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Why You Should Hold Marsh & McLennan (MMC) in Your Portfolio
Marsh & McLennan Companies, Inc. (MMC - Free Report) has been in investors' good books on the back of its strategic initiatives, which led to its business expansion.
Over the past 30 days, the stock has witnessed its earnings estimates for 2020 being revised 4.5% upward, reflecting analysts' optimism on the stock.
It retained investors' favorable sentiment by maintaining its beat streak in all the last four quarters, the average being 8.4%. This, in turn, underlines its operational excellence.
In second-quarter 2020, the company delivered adjusted earnings per share of $1.32, surpassing the Zacks Consensus Estimate by 15.8% on reduced expenses and a solid contribution from its Risk and Insurance Services segment. Moreover, the bottom line increased 11.9% year over year.
The company’s operating efficiency, driven by its diverse product offerings, a wide geographic footprint and strong client retention is worth mentioning. This also contributed to its top line. Revenues have been consistently rising since 2010 (except 2015). 2019 also marks the highest annual revenue growth rate for the company in 20 years. In the first six months of 2020, revenues of $8.8 billion were up 5% (2% on an underlying basis) owing to a strong Risk and Insurances Services Segment.
Acquisitions form one of the core growth strategies at Marsh & McLennan. The company made numerous purchases within its different operating units that enabled it to enter new geographical regions, expand within the existing ones, foray into untapped businesses, develop new segments and specialize within its existing businesses. Its JLT buyout in 2019 enhanced its portfolio. The Risk and Insurance Services segment completed two acquisitions in the first quarter of 2020. In the first six months of this year, the company spent $1.2 billion on buyouts.
Investors should be impressed by its disciplined capital management. In July 2020, its board of directors hiked its quarterly cash dividend by 2.2%, reflecting the 11th consecutive year of dividend increase at Marsh & McLennan. Its current dividend yield of 1.6% is higher than the industry average of 1.3%.
However, the company’s operating expenses escalated over the last several years due to higher compensation and benefits. The same further increased 14.7% and 1.2% in 2019 and during the first six months of 2020, respectively. A persistent escalation of expenses might weigh on the company’s margins.
Zacks Rank and Price Performance
Shares of this presently Zacks Rank #3 (Hold) company have gained 20.8% in a year’s time, outperforming its industry’s growth of 7.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other stocks in the same space, such as Brown Brown, Inc. (BRO - Free Report) , Aon plc (AON - Free Report) and Arthur J. Gallagher Co. (AJG - Free Report) have returned 29%, 3.9% and 21.3%, respectively, in the same time frame.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>