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Should You Buy Marsh & McLennan Stock Now to Minimize Risk?

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Marsh & McLennan Companies, Inc. (MMC - Free Report) is one of the major insurance brokers with a diversified set of businesses and an expanding geographical footprint. With a market cap of $109.8 billion, the company’s strong international operations and growing Risk and Insurance Services segment are major tailwinds.

Investors can go with this insurance giant to reduce risk in their portfolios. Shares of Marsh & McLennan have jumped 18.4% in the year-to-date period, outperforming the S&P 500 Index’s 17.8% growth. It has the ingredients for further price appreciation.

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MMC Mitigating Risks

The company generates most of its revenues from developed and western markets, limiting geographic risks. This is beneficial against growing geopolitical volatilities. Also, it has expanding operations in emerging markets like Asia-Pacific and Latin America regions, which positions it for long-term growth.  

MMC typically maintains long-term relationships with its clients because the company has a deep understanding of their risk exposure and experience in securing their assets. This makes it difficult and risky for clients to switch brokers. The strong customer loyalty and high switching costs are further reinforced by MMC's unmatched global presence and industry insights, which large businesses — MMC's primary clients — value more than what smaller competitors can offer.

With a beta of 0.94, Marsh & McLennan’s stock is less volatile than the market. The company's consulting business plays a crucial role in retaining clients and attracting new ones through upselling, setting it apart from competitors who lack the same level of experience and scale. Additionally, this Zacks Rank #2 (Buy) company’s ability to generate proprietary data gives it a significant edge over the competition. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Marsh & McLennan's stable operations, diverse product offerings and advancements in digital capabilities are expected to drive profit growth while maintaining a transparent trajectory. Its growing strength in the Marsh unit, especially in the United States/Canada market, will continue to boost the bottom line, as evident from the recent estimate revisions trend. Let's take a closer look at the estimates for MMC in 2024 and 2025.

MMC Estimate Revisions Trend

The Zacks Consensus Estimate MMC’s 2024 bottom line is pegged at $8.74 per share, indicating 9.4% year-over-year growth. It has witnessed two upward estimate revisions in the past month against no movement in the opposite direction. The consensus estimate for 2025 earnings signals an 8% further gain. The company has managed to beat earnings estimates in each of the past four quarters with an average surprise of 5.8%. Also, the consensus mark for 2024 and 2025 revenues indicates 6.7% and 5.7% year-over-year increases, respectively.

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Other Key Picks

Investors interested in the broader Finance space may look at some other top-ranked players like Aflac Incorporated (AFL - Free Report) , Brown & Brown, Inc. (BRO - Free Report) and Arthur J. Gallagher & Co. (AJG - Free Report) , each carrying a Zacks Rank #2 at present.

The Zacks Consensus Estimate for Aflac’s current-year earnings is pegged at $6.73 per share, which indicates 8% year-over-year growth. It witnessed seven upward estimate revisions in the past 30 days against no downward movements. AFL beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 8.2%.

The Zacks Consensus Estimate for Brown & Brown’s 2024 earnings indicates 31% year-over-year growth. During the past two months, BRO has witnessed six upward estimate revisions against none in the opposite direction. It beat earnings estimates in each of the past four quarters, with an average surprise of 9.8%.

The Zacks Consensus Estimate for Arthur J. Gallagher’s current-year earnings suggests a 16% year-over-year jump. During the past two months, AJG has witnessed six upward estimate revisions against none in the opposite direction. The consensus mark for current-year revenues indicates 14.5% growth from a year ago.

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