Estimates have been rising for Marsh & McLennan Companies, Inc. (MMC) since the company reported solid Q4 results. Earnings per share came in at 41 cents, beating the Zacks Consensus Estimate by 5%.
MMC offers investors both growth and income. The stock yields an attractive 2.9%, and analysts project 13% EPS growth in 2011 and 14% growth in 2012.
Marsh & McLennan is a diversified risk, insurance and professional services firm.
Fourth Quarter Results
The company reported its results for the fourth quarter of 2011 on February 15. Revenue was $2.8 billion, a 9% increase over the same quarter in 2009. Excluding acquisitions and foreign currency effects, revenue rose 6%.
Risk and insurance services, which accounted for 53% of total revenue, increased 5%. Consulting revenue, which made up the other 47%, increased 6%.
Meanwhile, adjusted operating income was up 22%.
Earnings per share came in at 41 cents, beating the Zacks Consensus Estimate by 2 cents. It was an 8% increase over the same quarter in 2009.
Outlook
Estimates have been rising off the strong quarter, sending the stock to a Zacks #2 Rank (Buy) stock.
Analysts are projecting solid growth from MMC over the next two years. The Zacks Consensus Estimate for 2011 is $1.86, representing 13% EPS growth. The 2012 consensus estimate is currently 14% higher at $2.13.
Dividend
Marsh & McLennan pays a dividend that yields 2.9%. The company did cut its dividend in half in 2005, but has raised it three times since then.
Shares trade at 15.7x forward earnings, a premium to the industry average of 12.7x, but a discount to its 10-year median forward P/E of 17.0x.
Marsh & McLennan is headquartered in New York, New York and has a market cap of $16.0 billion.
Todd Bunton is the Growth & Income Stock Strategist for Zacks.com.
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