Marsh McLennan Beta vs. Return On Equity
| MMC Stock | USD 208.13 0.36 0.17% |
| Current Value | Last Year | Change From Last Year | 10 Year Trend | ||||||
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| Gross Profit Margin | 0.26 | 0.4239 |
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| Net Profit Margin | 0.088 | 0.1652 |
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| Operating Profit Margin | 0.19 | 0.2323 |
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| Pretax Profit Margin | 0.18 | 0.2211 |
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| Return On Assets | 0.0953 | 0.0782 |
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| Return On Equity | 0.25 | 0.3081 |
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For Marsh McLennan profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Marsh McLennan to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Marsh McLennan Companies utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Marsh McLennan's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Marsh McLennan Companies over time as well as its relative position and ranking within its peers.
Marsh |
Marsh McLennan's Revenue Breakdown by Earning Segment
Check out Correlation Analysis.
Is Insurance Brokers space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Marsh McLennan. If investors know Marsh will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Marsh McLennan listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth 0.142 | Dividend Share 2.84 | Earnings Share 7.89 | Revenue Per Share 47.207 | Quarterly Revenue Growth 0.093 |
The market value of Marsh McLennan Companies is measured differently than its book value, which is the value of Marsh that is recorded on the company's balance sheet. Investors also form their own opinion of Marsh McLennan's value that differs from its market value or its book value, called intrinsic value, which is Marsh McLennan's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Marsh McLennan's market value can be influenced by many factors that don't directly affect Marsh McLennan's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Marsh McLennan's value and its price as these two are different measures arrived at by different means. Investors typically determine if Marsh McLennan is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Marsh McLennan's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.
Marsh McLennan Companies Return On Equity vs. Beta Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining Marsh McLennan's current stock value. Our valuation model uses many indicators to compare Marsh McLennan value to that of its competitors to determine the firm's financial worth. Marsh McLennan Companies is regarded third in beta category among its peers. It also is regarded third in return on equity category among its peers reporting about 0.37 of Return On Equity per Beta. The ratio of Beta to Return On Equity for Marsh McLennan Companies is roughly 2.68 . At present, Marsh McLennan's Return On Equity is projected to increase slightly based on the last few years of reporting. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Marsh McLennan's earnings, one of the primary drivers of an investment's value.Marsh Return On Equity vs. Beta
Beta is one of the most important measures of equity market volatility. Beta can be thought of as asset elasticity or sensitivity to market. In other words, it is a number that shows the relationship of an equity instrument to the financial market in which this instrument is traded. For example, if Beta of equity is 2, it is expected to significantly outperform market when the market is going up and significantly underperform when the market is going down. Similarly, Beta of 1 indicates that an asset and market will generate similar returns over time.
Marsh McLennan |
| = | 0.9 |
In a nutshell, Beta is a measure of individual stock risk relative to the overall volatility of the stock market. and is calculated based on very sound finance theory - Capital Assets Pricing Model (CAPM).However, since Beta is calculated based on historical price movements it may not predict how a firm's stock is going to perform in the future.
Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.
Marsh McLennan |
| = | 0.33 |
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.
Marsh Return On Equity Comparison
Marsh McLennan is currently under evaluation in return on equity category among its peers.
Beta Analysis
Marsh McLennan returns are very sensitive to returns on the market. As the market goes up or down, Marsh McLennan is expected to follow.
Marsh McLennan Profitability Projections
The most important aspect of a successful company is its ability to generate a profit. For investors in Marsh McLennan, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Marsh McLennan will eventually generate negative long term returns. The profitability progress is the general direction of Marsh McLennan's change in net profit over the period of time. It can combine multiple indicators of Marsh McLennan, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
| Last Reported | Projected for Next Year | ||
| Accumulated Other Comprehensive Income | -5.3 B | -5 B | |
| Operating Income | 5.3 B | 5.5 B | |
| Income Before Tax | 5 B | 5.3 B | |
| Total Other Income Expense Net | -256 M | -243.2 M | |
| Net Income | 3.8 B | 4 B | |
| Income Tax Expense | 1.2 B | 1.3 B | |
| Net Income Applicable To Common Shares | 3.5 B | 3.7 B | |
| Net Income From Continuing Ops | 3.5 B | 1.9 B | |
| Non Operating Income Net Other | 41.4 M | 43.5 M | |
| Interest Income | 49 M | 46.5 M | |
| Net Interest Income | -505 M | -530.2 M | |
| Change To Netincome | 309.4 M | 248.9 M | |
| Net Income Per Share | 7.60 | 7.98 | |
| Income Quality | 1.12 | 1.23 | |
| Net Income Per E B T | 0.75 | 0.54 |
Marsh Profitability Driver Comparison
Profitability drivers are factors that can directly affect your investment outlook on Marsh McLennan. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Marsh McLennan position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Marsh McLennan's important profitability drivers and their relationship over time.
Use Marsh McLennan in pair-trading
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Marsh McLennan position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Marsh McLennan will appreciate offsetting losses from the drop in the long position's value.Marsh McLennan Pair Trading
Marsh McLennan Companies Pair Trading Analysis
The ability to find closely correlated positions to Marsh McLennan could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Marsh McLennan when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Marsh McLennan - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Marsh McLennan Companies to buy it.
The correlation of Marsh McLennan is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Marsh McLennan moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Marsh McLennan Companies moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Marsh McLennan can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Use Investing Themes to Complement your Marsh McLennan position
In addition to having Marsh McLennan in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.Did You Try This Idea?
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You can either use a buy-and-hold strategy to lock in the entire theme or actively trade it to take advantage of the short-term price volatility of individual constituents. Macroaxis can help you discover thousands of investment opportunities in different asset classes. In addition, you can partner with us for reliable portfolio optimization as you plan to utilize Materials ETFs Theme or any other thematic opportunities.
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Additional Information and Resources on Investing in Marsh Stock
When determining whether Marsh McLennan Companies offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Marsh McLennan's financial statements, including income statements, balance sheets, and cash flow statements, to assess its financial health. Key financial ratios are used to gauge profitability, efficiency, and growth potential of Marsh Mclennan Companies Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Marsh Mclennan Companies Stock:Check out Correlation Analysis. You can also try the Global Correlations module to find global opportunities by holding instruments from different markets.
To fully project Marsh McLennan's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Marsh McLennan Companies at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Marsh McLennan's income statement, its balance sheet, and the statement of cash flows.