Marsh & McLennan Companies (NYSE: MMC) and Willis Towers Watson (NASDAQ:WLTW) are both large-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, risk, institutional ownership, profitability, analyst recommendations, valuation and dividends.
This table compares Marsh & McLennan Companies and Willis Towers Watson’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Marsh & McLennan Companies||10.64%||28.80%||10.36%|
|Willis Towers Watson||6.93%||11.25%||3.56%|
This is a summary of current recommendations and price targets for Marsh & McLennan Companies and Willis Towers Watson, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Marsh & McLennan Companies||0||5||5||0||2.50|
|Willis Towers Watson||2||4||11||0||2.53|
Marsh & McLennan Companies currently has a consensus price target of $89.67, indicating a potential upside of 6.71%. Willis Towers Watson has a consensus price target of $170.64, indicating a potential upside of 11.58%. Given Willis Towers Watson’s stronger consensus rating and higher probable upside, analysts plainly believe Willis Towers Watson is more favorable than Marsh & McLennan Companies.
Insider & Institutional Ownership
85.7% of Marsh & McLennan Companies shares are held by institutional investors. Comparatively, 93.6% of Willis Towers Watson shares are held by institutional investors. 1.2% of Marsh & McLennan Companies shares are held by company insiders. Comparatively, 0.5% of Willis Towers Watson shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Marsh & McLennan Companies pays an annual dividend of $1.50 per share and has a dividend yield of 1.8%. Willis Towers Watson pays an annual dividend of $2.40 per share and has a dividend yield of 1.6%. Marsh & McLennan Companies pays out 38.3% of its earnings in the form of a dividend. Willis Towers Watson pays out 28.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Marsh & McLennan Companies has increased its dividend for 8 consecutive years. Marsh & McLennan Companies is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk and Volatility
Marsh & McLennan Companies has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500. Comparatively, Willis Towers Watson has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500.
Earnings and Valuation
This table compares Marsh & McLennan Companies and Willis Towers Watson’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Marsh & McLennan Companies||$14.02 billion||3.04||$1.49 billion||$3.92||21.44|
|Willis Towers Watson||$8.20 billion||2.47||$568.00 million||$8.51||17.97|
Marsh & McLennan Companies has higher revenue and earnings than Willis Towers Watson. Willis Towers Watson is trading at a lower price-to-earnings ratio than Marsh & McLennan Companies, indicating that it is currently the more affordable of the two stocks.
Marsh & McLennan Companies beats Willis Towers Watson on 11 of the 17 factors compared between the two stocks.
About Marsh & McLennan Companies
Marsh & McLennan Companies, Inc., a professional services firm, provides advice and solutions in the areas of risk, strategy, and people worldwide. It operates in two segments, Risk and Insurance Services, and Consulting. The Risk and Insurance Services segment offers risk management services, such as risk advice, risk transfer, and risk control and mitigation solutions, as well as insurance, reinsurance broking, catastrophe and financial modeling, and related advisory services. This segment serves businesses, public entities, insurance companies, associations, professional services organizations, and private clients. The Consulting segment provides health, retirement, talent, and investments consulting services and products; and specialized management, and economic and brand consulting services. The company was founded in 1871 and is headquartered in New York, New York.
About Willis Towers Watson
Willis Towers Watson Public Limited Company operates as an advisory, broking, and solutions company worldwide. Its Human Capital and Benefits segment provides actuarial support, plan design, and administrative services for traditional pension and retirement savings plans; plan management consulting, broking, and administration services for health and group benefit programs; and benefits outsourcing services. This segment also offers advice, data, software, and products to address clients' total rewards and talent issues. The company's Corporate Risk and Broking segment provides risk advice, insurance brokerage, and consulting services in the areas of property and casualty, financial lines, transport, and facultative. Its Investment, Risk and Reinsurance segment offers capital markets-based products to insurance and reinsurance companies; software and technology, risk and capital management, products and pricing, financial and regulatory reporting, financial and capital modeling, merger and acquisition, outsourcing, and business management services; investment advice and solutions to pension funds and institutional investors; wholesale insurance broking services to retail brokers; and portfolio and underwriting, and capital markets and advisory services. The company's Benefit Delivery and Administration segment provides primary medical and ancillary benefit exchange, and outsourcing services to active employees and retirees across the group and individual markets. This segment delivers health savings and flexible spending accounts, health reimbursement arrangements, and other consumer-directed accounts. The company was formerly known as Willis Group Holdings Public Limited Company and changed its name to Willis Towers Watson Public Limited Company in January 2016. Willis Towers Watson Public Limited Company was founded in 1828 and is based in London, the United Kingdom.
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