Assessing Marsh & McLennan Companies, Inc.’s (NYSE:MMC) past track record of performance is a useful exercise for investors. It allows us to understand whether the company has met or exceed expectations, which is a great indicator for future performance. Below, I assess MMC’s latest performance announced on 31 December 2018 and evaluate these figures to its historical trend and industry movements.
Were MMC’s earnings stronger than its past performances and the industry?
MMC’s trailing twelve-month earnings (from 31 December 2018) of US$1.7b has jumped 11% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 4.0%, indicating the rate at which MMC is growing has accelerated. What’s enabled this growth? Well, let’s take a look at if it is only a result of an industry uplift, or if Marsh & McLennan Companies has seen some company-specific growth.
In terms of returns from investment, Marsh & McLennan Companies has invested its equity funds well leading to a 22% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 8.9% exceeds the US Insurance industry of 2.2%, indicating Marsh & McLennan Companies has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Marsh & McLennan Companies’s debt level, has increased over the past 3 years from 17% to 18%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Marsh & McLennan Companies gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Marsh & McLennan Companies to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for MMC’s future growth? Take a look at our free research report of analyst consensus for MMC’s outlook.
- Financial Health: Are MMC’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2018. This may not be consistent with full year annual report figures.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.