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The Upside of Staying Invested in Marsh & McLennan Stock The Upside of Staying Invested in Marsh & McLennan Stock

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Marsh & McLennan Companies, Inc. MMC is thriving with sustained revenue growth, burgeoning new business ventures, strategic acquisitions, and a formidable financial position.

The Rising Rank and Stock Price Surge

Marsh & McLennan currently holds a Zacks Rank #3 (Hold).

Over the past year, the stock has soared by 30.4%, outpacing the industry’s 25.6% climb. Compare this to the Finance sector’s 26.4% surge and the S&P 500’s 29.4% uptick during the same period.

Zacks Investment Research
Image Source: Zacks Investment Research

Growth Prospects in Full Bloom

Estimates project Marsh & McLennan’s 2024 earnings at $8.56 per share, reflecting a 7.1% rise from 2023. Revenues are anticipated to hit $24.2 billion, a 6.5% increase from the previous year.

Looking ahead to 2025, earnings are expected to jump by 8.9% to $9.33 per share. Revenue estimates stand at $25.5 billion, a 5.5% rise from the prior year.

Consistent Earnings Surprises and Strong Equity Returns

Marsh & McLennan has consistently exceeded earnings estimates over the past four quarters, with an average surprise of 6.45%.

The company’s return on equity stands at 33.7%, surpassing the industry average of 31.4%, demonstrating its adeptness in leveraging shareholder funds.

Propitious Business Landscape

Marsh & McLennan’s revenue stream is bolstered by robust performances in the Risk and Insurance Services, along with Consulting segments. Revenues have shown constant growth since 2010, with management eyeing mid-single-digit or greater revenue growth in 2024.

The Risk and Insurance Services segment, constituting 62% of MMC’s total revenue in 2023, benefits from new business growth, enhanced renewal rates, and upbeat insurance and reinsurance rates. On the other hand, the Consulting segment, contributing 38% to revenues, sees demand for health, wealth, and career solutions propelling its growth.

Marsh & McLennan’s aggressive acquisition strategy, with acquisitions totaling millions in 2023 and 2022, cements its foothold in new regions, expands its existing businesses, and fuels specialization.

A Sound Financial Foundation

An active acquisition spree is fueled by Marsh & McLennan’s robust financial standing. The company boasts solid cash reserves and healthy cash flows, with operating cash flows reaching $4.3 billion in 2023, a 22.9% yearly hike.

This financial prowess also enables MMC to reward shareholders through dividends and buybacks, with a 14-year dividend increase streak and a dividend yield above the industry average.

Promising Stock Alternatives

In the insurance sector, other notable stocks include CNO Financial Group, Inc., Erie Indemnity Company, and Assurant, Inc. These companies sport favorable Zacks Ranks, with CNO Financial leading with a Zacks Rank #1 (Strong Buy).

CNO Financial has seen its earnings beat estimates in multiple quarters, while Erie Indemnity and Assurant exhibit strong growth potential and favorable market performance. These alternatives offer investors additional strategic investment avenues within the insurance industry.

Infrastructure Stock Boom to Sweep America

Amidst the push to revamp U.S. infrastructure, countless opportunities loom. With trillions earmarked for this critical sector, the question remains, β€œWill you be at the forefront of a lucrative investment wave?”

Stay informed with Zacks’ Special Report to identify the prime beneficiaries of the upcoming construction and repair initiatives to maximize your investment potential.

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