Riding on a steady growth momentum, shares of
Marsh & McLennan Cos.
) hit a new 52-week high of $48.83 on Jan 21. This insurance and
brokerage service provider's shares have escalated a whopping 40%
since the beginning of 2013.
Moreover, shares of Marsh & McLennan steadily rose about
5% alone after the company reported its third-quarter 2013
results in the beginning of Nov 2013. The company also delivered
positive earnings surprise in all of the last 4 quarters, with an
average beat of 3.6%. The encouraging momentum of this Zacks Rank
#2 (Buy) stock is fuelled by improved core growth coupled with a
strong competitive position.
Yesterday's closing price represents a robust one-year return
of about 38.9% against a return of 25.7% clocked by the S&P
500 index. Average volume of shares traded over the last three
months stands at approximately 1,812.3K.
On Nov 6, Marsh & McLennan reported third-quarter
operating earnings per share of 46 cents, which were in line with
the Zacks Consensus Estimate. However, results outpaced the
year-ago quarter number of 39 cents.
Results reflected about 20% growth in operating net income,
driven by an improved top line and disciplined expense
management. Robust growth was also witnessed within Latin
America, Asia-Pacific and EMEA. Overall, top-line growth was
achieved across all the segments. Consequently, adjusted
operating margin improved to 14.1% from 12.6% in the year-ago
Marsh & McLennan benefits from global acquisitions that
generate new clients and trigger growth. Moreover, steady
earnings growth, low capital requirement and financial
flexibility continue to support capital deployment
effectively.While the company repurchased $230 million shares
during 2012, another $400 million were bought back in the first
nine months of 2013 itself, boosting shareholder confidence.
Overall, we believe the upcoming quarters should benefit from
improved pricing, stable ratings and other macro factors. Even
the estimated long-term earnings growth for Marsh & McLennan
is pegged at a decent 12.1%, in line with the peer group
Some other top-ranked insurers that warrant a look are
). All these stocks sport a Zacks Rank #1 (Strong Buy).
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