Has Marsh & McLennan Companies Inc (NYSE:MMC) Improved Earnings Growth In Recent Times?
Measuring Marsh & McLennan Companies Inc’s (NYSE:MMC) track record of past performance is an insightful exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess MMC’s recent performance announced on 30 September 2017 and compare these figures to its historical trend and industry movements. See our latest analysis for Marsh & McLennan Companies
How Did MMC’s Recent Performance Stack Up Against Its Past?
I like to use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This blend enables me to assess various companies on a similar basis, using the latest information. For Marsh & McLennan Companies, its latest earnings (trailing twelve month) is $1,899.0M, which compared to the prior year’s figure, has risen by 11.31%. Given that these figures may be fairly short-term, I have computed an annualized five-year value for MMC’s net income, which stands at $1,371.9M. This suggests that, generally, Marsh & McLennan Companies has been able to gradually grow its net income over the past few years as well.
What’s enabled this growth? Well, let’s take a look at whether it is solely because of an industry uplift, or if Marsh & McLennan Companies has seen some company-specific growth. Over the past couple of years, Marsh & McLennan Companies increased its bottom line faster than revenue by effectively controlling its costs. This brought about a margin expansion and profitability over time. Inspecting growth from a sector-level, the US insurance industry has been growing, albeit, at a unexciting single-digit rate of 6.15% over the past year, and 8.79% over the past half a decade. This means whatever tailwind the industry is benefiting from, Marsh & McLennan Companies is able to amplify this to its advantage.
What does this mean?
Marsh & McLennan Companies’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I suggest you continue to research Marsh & McLennan Companies to get a more holistic view of the stock by looking at:
1. 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.
2. Financial Health: Is 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.
3. 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 30 September 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
