Marsh & McLennan Companies, Inc. MMC is aided by sustained revenue growth, a commendable acquisition strategy, rate hikes and sound financial position.

MMC Stock’s Zacks Rank & Price Rally

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

The stock has gained 8.4% year to date compared with the industry’s 7.3% growth. The Zacks Finance sector and the S&P 500 composite have declined 7.6% and 14.1%, respectively, in the said time frame.

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Robust Growth Prospects of MMC Stock

The Zacks Consensus Estimate for Marsh & McLennan’s 2025 earnings is pegged at $9.57 per share, indicating a 8.8% increase from the 2024 figure. The estimate for revenues is $26.9 billion, implying 9.9% growth from the prior-year number. 

The consensus estimate for 2026 earnings is pegged at $10.45 per share, indicating 9.1% growth from the 2025 estimate. The same for revenues is $28.4 billion, which indicates a rise of 5.5% from the prior-year estimate.

MMC’s Robust Earnings Surprise History

MMC boasts an impressive surprise history. Its earnings outpaced estimates in each of the trailing four quarters, the average surprise being 3.13%.

Solid Return on Equity of MMC Stock

The return on equity for Marsh & McLennan is currently 32.6%, which is higher than the industry’s average of 29.5%. The figure substantiates the company’s efficiency in utilizing shareholders’ funds.

Business Tailwinds of MMC

Marsh & McLennan’s revenue momentum continues to be fueled by robust performance across both its Risk and Insurance Services and Consulting divisions. Since 2010, the company has consistently grown its top line, with the sole exception of 2015. For 2025, management anticipates achieving underlying revenue growth in the mid-single digits.

The Risk and Insurance Services segment is experiencing positive traction, driven by strong new business generation, rising renewal rates and favorable trends in insurance and reinsurance pricing, bolstered by an expanding global economy. During 2024, the segment completed 10 acquisitions, some of which were those of Fisher Brown Bottrell Insurance, AmeriStar Agency, The Horton Group, McGriff and Acumen Solutions Group. 

Meanwhile, the Consulting division continues to thrive, supported by sustained demand for its health, wealth and career advisory services. This segment also broadened its capabilities through seven strategic acquisitions over the same time frame.

Marsh & McLennan remains committed to an active acquisition strategy, regularly pursuing opportunities across its business segments to strengthen its global presence, tap into new markets and enhance its existing service offerings. In 2024 alone, the company invested $8.5 billion in acquisitions. A notable recent transaction was the acquisition of Pennsylvania-based Arthur Hall Insurance, which delivers specialized expertise in both the commercial and personal insurance lines to clients nationwide. 

Underpinning its growth and acquisition ambitions is Marsh & McLennan’s solid financial position. The company benefits from healthy cash reserves and strong cash flow generation, enabling it not only to pursue strategic investments but also to consistently return value to shareholders through dividends and share repurchases. Its current dividend yield of 1.4% surpasses the industry average of 1%.

MMC’s Key Risks

The company’s operating expenses have steadily risen in the past few years. The metric escalated 6.8% in 2024, due to higher salaries and incentives. Meanwhile, long-term debt grew from $11.8 billion in 2023 to $19.4 billion by 2024-end. A debt-laden balance sheet induces an increase in interest expenses, which escalated 21.1% in 2024. Management forecasts the metric at around $246 million for the first quarter of 2025. Despite deleveraging efforts, rising costs and debt remain concerns, potentially pressuring margins.

Stocks to Consider

Some better-ranked stocks in the insurance space are EverQuote, Inc. EVER, Brown & Brown, Inc. BRO and The Progressive Corporation PGR. While EverQuote sports a Zacks Rank #1 (Strong Buy), Brown & Brown and Progressive carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

EverQuote’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 160.73%. The Zacks Consensus Estimate for EVER’s 2025 earnings indicates a 36.4% rise while the estimate for revenues implies an improvement of 25.2% from the respective prior-year figures. 

The consensus mark for EVER’s earnings has moved 6.2% north in the past 30 days. Shares of EverQuote have gained 8.4% year to date. 

Brown & Brown’s earnings surpassed estimates in each of the last four quarters, the average surprise being 8.18%. The Zacks Consensus Estimate for BRO’s 2025 earnings indicates a 9.1% rise while the estimate for revenues implies an improvement of 8.4% from the respective prior-year figures. 

The consensus mark for BRO’s earnings has moved 0.2% north in the past 30 days. Shares of Brown & Brown have gained 10.6% year to date.

Progressive’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 18.49%. The Zacks Consensus Estimate for PGR’s 2025 earnings indicates a 9.8% rise while the estimate for revenues implies an improvement of 16.1% from the respective prior-year figures. 

The consensus mark for PGR’s earnings has moved up 0.6% in the past 30 days.  Shares of Progressive have gained 7% year to date.

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Marsh & McLennan Companies, Inc. (MMC) : Free Stock Analysis Report

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This article originally published on Zacks Investment Research (zacks.com).

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