Reasons Why Investors Should Hold on to Marsh & McLennan Shares Now

Marsh & McLennan Companies, Inc. MMC is well-positioned for growth, leveraging strong Marsh and Guy Carpenter businesses and Consulting segment, new business generation and prudent acquisitions. Favorable earnings estimates indicate that the company is on the right track.

Headquartered in New York, Marsh & McLennan is a massive insurance company with a market cap of $114 billion. With solid prospects, this Zacks Rank #3 (Hold) stock is deemed worthwhile for holding on to at the moment. In this analysis, we'll explore the growth drivers and estimates and highlight the key factors investors should monitor.

Let’s delve deeper.

The Zacks Consensus Estimate for MMC’s 2025 and 2026 earnings is pegged at $9.57 and $10.38 per share, respectively, which indicates 8.8% and 8.4% year-over-year growth. Marsh & McLennan beat on earnings in each of the last four quarters, the average being 2.6%.

Marsh & McLennan Companies, Inc. Price and EPS Surprise

Marsh & McLennan Companies, Inc. price-eps-surprise | Marsh & McLennan Companies, Inc. Quote

The consensus mark for 2025 and 2026 revenues predicts 10.1% and 5.4% year-over-year increases, respectively. Solid new business and renewals in Marsh and growth in most geographies in Guy Carpenter are likely to support the top line.

Marsh & McLennan has delivered consistently strong operating performance over the years, supported by its diversified product portfolio, broad geographic presence and high client retention rates. Ongoing rate increases in the commercial property and casualty insurance market are expected to further boost top-line growth. Additionally, the company’s investments in launching new products and services, enhancing digital capabilities and expanding into adjacent businesses continue to strengthen its growth trajectory.

Acquisitions remain a central pillar of Marsh & McLennan’s long-term strategy. The company has made a series of strategic purchases across its business segments, allowing it to enter new markets, deepen its presence in existing ones, explore new business lines and strengthen capabilities within current operations. Notable recent acquisitions include Arthur Hall Insurance, AmeriStar and the $7.75 billion acquisition of McGriff Insurance Services.

The company also maintains a solid record of cash flow generation, which supports its disciplined approach to capital deployment. Marsh & McLennan continues to reward shareholders through consistent dividends and share repurchases. Its dividend yield of 1.4% exceeds the industry average of 1%, reflecting its commitment to shareholder returns. In 2024, the company repurchased $900 million worth of shares, followed by an additional $300 million in the first quarter of 2025. As of March 31, 2025, approximately $2 billion remained available under its current buyback authorization.

Risks

There are some factors, however, that investors should keep a careful eye on.

The company’s operating expenses escalated over the last several years due to higher compensation and benefits. Total expenses increased 9.5% in 2021, 6% in 2022, 6% in 2023, 6.8% in 2024 and 11.2% in the first quarter of 2025. The persistent escalation of expenses might weigh on its margin growth.

The company carries a significant debt burden of $18.9 billion as of March 31, 2025. Its long-term debt-to-capital of 56.9% is higher than the industry’s 50%. Also, its forward P/E ratio of 23.46X is higher than its five-year median of 23.15X and industry average of 23.02X.

Key Picks

Investors interested in the broader Finance space can look at some better-ranked stocks like Kemper KMPR, MGIC Investment MTG and Hamilton Insurance Group HG, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Kemper’s 2025 full-year earnings indicates 6.5% year-over-year growth. It beat earnings estimates in each of the past four quarters, with an average surprise of 21.1%. Also, the consensus mark for Kemper’s 2025 revenues implies 7.5% year-over-year growth.

The consensus mark for MGIC Investment’s 2025 earnings witnessed one upward estimate revision in the past month against no downward movement.  It beat earnings estimates in each of the past four quarters, with an average surprise of 15.9%. Furthermore, the consensus estimate for MGIC Investment’s 2025 revenues implies 2.9% year-over-year growth.

The Zacks Consensus Estimate for Hamilton’s 2025 full-year earnings witnessed one upward estimate revision in the past 60 days against no movement in the opposite direction. It beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 264.1%. Also, the consensus mark for Hamilton’s 2025 revenues implies 6.6% year-over-year growth.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research