Making steady progressions so far in 2014, shares of Marsh & McLennan Cos. (MMC) hit a new 52-week high of $52.66 on Jul 14. Notably, this insurance and brokerage service provider’s shares have risen 11.4% since the beginning of 2014.
Yesterday’s closing price represents a robust one-year return of about 25.6% against a return of 17.7% clocked by the S&P 500 index. Average volume of shares traded over the last three months stands at approximately 1,973.9K.
Further, the stock price appreciated about 8.5% alone after the company reported its first-quarter 2014 results in the beginning of May. Although the first-quarter 2014 earnings were at par with the Zacks Consensus Estimate, it shored up 11% from the year-ago quarter figure.
The improved market performance of Marsh & McLennanis driven by its strong competitive strength in the peer group. The company also delivered positive earnings surprises in 2 of the last 4 quarters, with an average beat of 2.4%.
The consistent stock price escalation ahead of the company’s second-quarter 2014 earnings release before the opening bell on Jul 29, also indicates improved results in consulting and insurance brokerage operations.
Marsh & McLennan’s sound financial position and lowered risk on leverage, despite cash outlays on myriad acquisitions in the past several quarters help in buoying market sentiment. The company has also been able to witness a modest improvement in margins, reflecting prudent enterprise management and successful integration of most acquisitions.
Furthermore, a healthy capital and balance sheet position not only enhances operating leverage, but also aids efficient capital deployment through share buybacks and dividend payouts, apart from acquisitions.
Currently, Marsh & McLennan carries a Zacks Rank #4 (Sell). Some better-ranked financial stocks include Total System Services Inc. (TSS), Blue Capital Reinsurance Holdings Ltd. (BCRH) and VeriFone Systems Inc. (PAY), all of which sport a Zacks Rank #1 (Strong Buy).