Marsh & McLennan Companies (NYSE: MMC) and Fortegra Financial (NYSE:FRF) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, valuation, profitability, risk and dividends.
Institutional & Insider Ownership
85.9% of Marsh & McLennan Companies shares are owned by institutional investors. 1.5% of Marsh & McLennan Companies shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Marsh & McLennan Companies has a beta of 1, indicating that its share price has a similar volatility profile to the S&P 500.Comparatively, Fortegra Financial has a beta of 0.89, indicating that its share price is 11% less volatile than the S&P 500.
Valuation and Earnings
This table compares Marsh & McLennan Companies and Fortegra Financial’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Marsh & McLennan Companies||$14.02 billion||2.99||$1.49 billion||$2.87||28.66|
Marsh & McLennan Companies has higher revenue and earnings than Fortegra Financial. Fortegra Financial 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 pays an annual dividend of $1.50 per share and has a dividend yield of 1.8%. Fortegra Financial does not pay a dividend. Marsh & McLennan Companies pays out 52.3% of its earnings in the form of a dividend. Fortegra Financial has raised its dividend for 8 consecutive years.
This is a breakdown of current ratings for Marsh & McLennan Companies and Fortegra Financial, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Marsh & McLennan Companies||0||5||5||0||2.50|
Marsh & McLennan Companies currently has a consensus target price of $87.10, indicating a potential upside of 5.88%. Given Marsh & McLennan Companies’ higher possible upside, equities analysts plainly believe Marsh & McLennan Companies is more favorable than Fortegra Financial.
This table compares Marsh & McLennan Companies and Fortegra Financial’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%|
Marsh & McLennan Companies beats Fortegra Financial on 12 of the 14 factors compared between the two stocks.
Marsh & McLennan Companies Company Profile
Marsh & McLennan Companies, Inc. is a professional services firm offering clients advice and solutions in risk, strategy and people. The Company is the parent company of various risk advisors and specialty consultants, including Marsh, the insurance broker; Guy Carpenter, the risk and reinsurance specialist; Mercer, the provider of human resource and investment related financial advice and services, and Oliver Wyman Group, the management and economic consultancy. It conducts business through two segments: Risk and Insurance Services, which includes risk management activities, as well as insurance and reinsurance broking and services, and Consulting includes health, retirement, talent and investments consulting services and products, and specialized management, economic and brand consulting services. It conducts business in the Risk and Insurance Services segment through Marsh and Guy Carpenter. It conducts business in the Consulting segment through Mercer and Oliver Wyman Group.
Fortegra Financial Company Profile
Fortegra Financial Corporation is specializing in insurance products and services. The Company’s business process outsourcing segment offers various administrative services under the Consecta and Pacific Benefits Group Northwest, LLC brand names to insurance and other financial services companies. The Company’s Payment Protection segment delivers credit insurance, debt protection, warranty and service contracts, and motor club solutions under the Life of the South, Continental Car Club, United Motor Club, and Auto Knight Motor Club brand names to consumer finance companies, regional banks, community banks, retailers, small loan companies, warranty administrators, automobile dealers, vacation ownership developers, and credit unions.
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