Contrasting Marsh & McLennan Companies (NYSE:MRSH) & Allstate (NYSE:ALL)

Marsh & McLennan Companies (NYSE:MRSH) and Allstate (NYSE:ALL) are both large-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, valuation, earnings, profitability, dividends, analyst recommendations and institutional ownership.

Insider and Institutional Ownership

88.0% of Marsh & McLennan Companies shares are held by institutional investors. Comparatively, 76.5% of Allstate shares are held by institutional investors. 0.4% of Marsh & McLennan Companies shares are held by company insiders. Comparatively, 1.5% of Allstate 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.

Valuation & Earnings

This table compares Marsh & McLennan Companies and Allstate”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Marsh & McLennan Companies	$26.98 billion	3.59	$4.16 billion	$8.36	24.35
Allstate	$67.69 billion	0.98	$10.28 billion	$50.08	5.22

Allstate has higher revenue and earnings than Marsh & McLennan Companies. Allstate 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.

Risk and Volatility

Marsh & McLennan Companies has a beta of 0.53, meaning that its stock price is 47% less volatile than the S&P 500. Comparatively, Allstate has a beta of 0.13, meaning that its stock price is 87% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Marsh & McLennan Companies and Allstate, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Marsh & McLennan Companies	2	9	7	2	2.45
Allstate	3	9	8	2	2.41

Marsh & McLennan Companies currently has a consensus price target of $205.84, indicating a potential upside of 1.13%. Allstate has a consensus price target of $270.19, indicating a potential upside of 3.30%. Given Allstate’s higher possible upside, analysts plainly believe Allstate is more favorable than Marsh & McLennan Companies.

Dividends

Marsh & McLennan Companies pays an annual dividend of $3.96 per share and has a dividend yield of 1.9%. Allstate pays an annual dividend of $4.32 per share and has a dividend yield of 1.7%. Marsh & McLennan Companies pays out 47.4% of its earnings in the form of a dividend. Allstate pays out 8.6% 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 raised its dividend for 15 consecutive years and Allstate has raised its dividend for 15 consecutive years.

Profitability

This table compares Marsh & McLennan Companies and Allstate’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Marsh & McLennan Companies	14.20%	33.32%	8.51%
Allstate	18.97%	41.64%	9.82%

Summary

Allstate beats Marsh & McLennan Companies on 10 of the 16 factors compared between the two stocks.

About Marsh & McLennan Companies

Marsh & McLennan Cos., Inc. is a professional services firm, which engages in offering clients advice and solutions in risk, strategy, and people. It operates through the Risk and Insurance Services, and Consulting segments. The Risk and Insurance Services segment is involved in risk management activities, as well as insurance and reinsurance broking and services. The Consulting segment offers health, wealth, and career solutions and products, and specialized management, strategic, economic, and brand consulting services. The company was founded by Henry W. Marsh and Donald R. McLennan in 1871 and is headquartered in New York, NY.

About Allstate

The Allstate Corporation, together with its subsidiaries, provides property and casualty, and other insurance products in the United States and Canada. It operates in five segments: Allstate Protection; Protection Services; Allstate Health and Benefits; Run-off Property-Liability; and Corporate and Other segments. The Allstate Protection segment offers private passenger auto and homeowners insurance; other personal lines products; and commercial lines products through agents, contact centers, and online. The Protection Services segment provides consumer product protection; protection and insurance products, including vehicle service contracts, guaranteed asset protection, road hazard tire and wheel, and paintless dent repair protection; and roadside assistance, device and mobile data collection services, and analytic solutions using automotive telematics information, as well as identity theft protection and remediation services. This segment also offers its products under various brands, including Allstate Protection Plans, Allstate Dealer Services, Allstate Roadside, Arity, Avail, and Allstate Identity Protection. The Allstate Health and Benefits segment provides life, accident, critical illness, short-term disability, and other health insurance products; stop-loss and fully insured group health products to employers; and short-term medical and medicare supplement insurance to individuals. The Run-off Property-Liability segment offers property and casualty insurance coverage that primarily relates to policies written during the 1960s through the mid-1980s. The Corporate and Other segment provides debt services, as well as non-insurance operations. It sells its products through agents, independent agents, call and contact centers, retailers, direct to consumer, wholesale partners, and affinity groups, as well as through online and mobile applications. The Allstate Corporation was founded in 1931 and is headquartered in Northbrook, Illinois.