Updated 3/11/25

Marsh & McLennan Companies, Inc. (MMC) is a global leader in risk management, insurance brokerage, and professional consulting. With operations spanning over 130 countries, the company plays a crucial role in advising businesses on everything from insurance placement to human capital strategies. MMC operates through four primary segments: Marsh, which focuses on insurance brokerage; Guy Carpenter, specializing in reinsurance and risk advisory; Mercer, which handles HR and benefits consulting; and Oliver Wyman, a strategy consulting firm.

For dividend investors, MMC is an interesting pick. While it doesn’t offer the highest yield in the market, it has built a strong reputation for consistent dividend payments and steady growth. Its financial stability and business resilience make it an appealing long-term holding for those who value steady income and compounding returns.

Key Dividend Metrics

📌 Dividend Yield: 1.38%
📌 Annual Dividend: $3.26 per share
📌 Payout Ratio: 37.29%
📌 5-Year Dividend Growth Rate: Increasing consistently
📌 Ex-Dividend Date: January 30, 2025
📌 Next Payment Date: February 14, 2025
📌 Dividend Safety: Strong, supported by steady cash flow

Dividend Overview

MMC has a long-standing commitment to returning capital to shareholders through dividends. While its 1.38% yield might not turn heads for income-focused investors searching for high payouts, the company’s reliability and track record of annual dividend hikes make it a solid choice for those prioritizing stability.

The payout ratio sits at 37.29%, which indicates that the company is not overextending itself. This provides plenty of flexibility to increase dividends further, even in the face of economic uncertainty. In comparison to other financial services firms, MMC has a reputation for steady and predictable dividend payments, even during recessions. That kind of resilience is valuable in today’s volatile market.

Dividend Growth and Safety

One of MMC’s standout qualities is its ability to consistently raise dividends over time. The company has built a strong history of dividend growth, fueled by solid earnings and disciplined capital allocation.

There are several factors supporting its dividend stability:

• The payout ratio remains at a comfortable level, leaving room for future growth.
• The company generates strong free cash flow, with levered free cash flow at $3.89 billion, providing ample liquidity to support its dividend program.
• MMC’s diversified business model ensures that it generates steady revenue across economic cycles, reducing the risk of dividend cuts.

For investors looking for a long-term dividend growth stock, MMC fits the bill. While its yield won’t rival high-dividend-paying stocks, the company’s reliability and consistent increases make it a strong option for those prioritizing dividend safety.

Chart Analysis

Overall Trend

The chart for Marsh & McLennan (MMC) shows a clear long-term uptrend with some periods of consolidation and corrections along the way. The stock has consistently stayed above its 200-day moving average (blue line), which signals strong underlying momentum. The recent rally pushed it above both the 50-day (orange line) and 200-day moving averages, reinforcing the bullish trend.

There was a notable pullback in late 2024, where the stock dipped below both moving averages before recovering sharply. This kind of movement often shakes out weak hands before continuing higher, and MMC appears to have bounced back with conviction.

Moving Averages

The 50-day moving average has been trending above the 200-day moving average for most of the past year, which is generally a bullish signal. However, there was a brief period in late 2024 when the 50-day dipped below the 200-day, which often raises concerns of a deeper correction. The stock managed to recover, and now the 50-day moving average is climbing again.

As of now, the price remains above both moving averages, which suggests the uptrend is intact. If the price were to drop back to the 50-day moving average and hold, it could act as a support level for another move higher.

Volume and Market Activity

Volume has been relatively stable, with a few spikes during periods of high volatility. The large volume spikes in mid-2024 and late 2024 suggest key moments when institutional investors were either accumulating or distributing shares.

More recently, volume appears lower compared to those volatile periods, which could indicate a cooling-off phase. If volume picks up again while the price remains elevated, it would be a strong signal that buyers are stepping in to support higher levels.

Relative Strength Index (RSI)

The RSI indicator at the bottom of the chart shows that MMC entered overbought territory earlier in 2025, followed by a slight pullback. This is a natural cycle, as stocks rarely remain overbought for extended periods without some kind of consolidation.

The RSI remains in a healthy range, suggesting there’s still room for the stock to move higher without being overextended. If it drops closer to the oversold zone, it could present a potential buying opportunity.

Recent Price Action

Looking at the last five candles, there’s a slight decrease in price from recent highs, but no dramatic sell-off. The wicks on recent candles suggest there has been some selling pressure at the top, but buyers are still keeping the stock from falling sharply.

A key level to watch is around 230, where the stock previously consolidated before moving higher. If the price finds support near this level, it could indicate another move upward. However, if it breaks below, a retest of the 50-day moving average might come into play.

Analyst Ratings

📈 Recent Upgrades

🔹 RBC Capital Markets upgraded MMC from “Sector Perform” to “Outperform” and raised their price target from $242 to $250. The firm cited strong financial performance and strategic positioning as key reasons for the upgrade.

🔹 Raymond James also raised its price target for MMC to $250 from $240, maintaining an “Outperform” rating. Analysts noted that the company’s operational efficiency and consistent growth have made it an attractive investment.

🔹 Deutsche Bank revised its price target to $258 from $236, reaffirming a “Buy” rating. The analysts pointed to MMC’s dominant market position and steady earnings expansion as reasons for their increased confidence in the stock.

📉 Recent Downgrades

🔻 Keefe, Bruyette & Woods lowered their price target from $214 to $210, maintaining an “Underperform” rating. Their concerns centered around MMC’s ability to sustain its growth in an evolving financial landscape.

🔻 Goldman Sachs adjusted its target price from $220 to $204, reiterating a “Sell” rating. Analysts expressed caution regarding MMC’s valuation, suggesting that it may be trading at a premium relative to its peers.

🎯 Consensus Price Target

The average analyst price target for MMC is currently $235.15, reflecting a mix of optimism and caution. Price targets range from $204 on the low end to $272 on the high end, indicating that while some analysts see further upside, others are wary of potential headwinds.

Earnings Report Summary

Marsh & McLennan Companies (MMC) wrapped up 2024 on a high note, delivering strong financial results that showcased steady growth across its core businesses. The company reported total revenue of $24.5 billion for the year, an 8% jump from the previous year. A good chunk of that growth came from its core operations, with underlying revenue climbing 7%, showing that demand for MMC’s services remains strong.

On the profitability side, operating income came in at $5.8 billion, up 10% from last year. Adjusted operating income, which smooths out one-time expenses, rose by 11% to $6.2 billion. Notably, MMC managed to expand its operating margins once again, marking 17 straight years of improvement in this area—an impressive streak that highlights strong cost discipline and efficiency.

Earnings per share (EPS) followed suit, with the company posting GAAP EPS of $8.18 for the year. Adjusted EPS, which investors often use to get a clearer picture of profitability, climbed 10% to $8.80. It’s clear that MMC isn’t just growing its top line—it’s finding ways to be more profitable at the same time.

In the final quarter of the year, the company kept up its momentum. Revenue for Q4 reached $6.1 billion, up 9% from the same period in 2023, with underlying revenue growth of 8%. GAAP EPS for the quarter came in at $1.59, while adjusted EPS saw an 11% boost to $1.87.

Digging into the business segments, the Risk and Insurance Services division was a big contributor to overall growth. It pulled in $15.4 billion in revenue for the year, up 9%, with Marsh’s insurance broking business growing 9% and Guy Carpenter’s reinsurance operations climbing 6%. Meanwhile, the Consulting segment brought in $9.1 billion in revenue, up 6% year-over-year, with Mercer growing 5% and Oliver Wyman posting a solid 9% increase.

Acquisitions were a big part of MMC’s strategy in 2024. The company made a major move by acquiring McGriff Insurance Services for $7.75 billion, its largest acquisition of the year, helping to strengthen its position in the insurance space. In total, MMC spent $9.4 billion on acquisitions, a record amount of capital deployment in its history.

Returning cash to shareholders was another key focus. The company repurchased 4.3 million shares of stock, spending about $900 million in buybacks—something long-term investors typically appreciate.

Looking ahead, MMC expects to continue growing at a steady pace in 2025, with mid-single-digit revenue growth, expanding profit margins, and higher earnings per share. While there are some headwinds, including potential pressure from foreign exchange and fiduciary income, the company’s solid fundamentals and smart acquisitions should help it stay on track.

All in all, MMC delivered a strong performance in 2024, demonstrating why it remains a leader in its field. The company’s ability to grow revenue, expand margins, and make strategic acquisitions keeps it well-positioned for the road ahead.

Financial Health and Stability

A company’s ability to pay and grow its dividend depends largely on its financial strength, and MMC has a solid foundation.

• Revenue for the trailing twelve months came in at $24.46 billion, reflecting a 9.2% year-over-year increase.
• Profit margins remain healthy, with a net margin of 16.6% and an operating margin of 24.59%.
• Return on equity is an impressive 31.78%, showcasing the company’s efficiency in generating shareholder value.
• MMC carries a significant amount of debt, with a total debt-to-equity ratio of 161.52%. While this is on the higher side, the company’s strong cash flow ensures it can comfortably service its obligations.

Overall, MMC’s financial health is solid. While the debt load is something to keep an eye on, it doesn’t pose an immediate risk given the company’s strong cash flow and ability to generate steady earnings.

Valuation and Stock Performance

MMC is currently trading at a price-to-earnings (P/E) ratio of 28.88 on a trailing basis and 24.27 on a forward basis. This suggests that the stock is priced at a premium relative to some financial sector peers, though investors may be willing to pay up for its stability and consistent earnings.

• The stock has been trading between $196.17 and $241.84 over the past 52 weeks.
• MMC is currently sitting above its 50-day moving average of $223.03 and its 200-day moving average of $220.74, indicating strong momentum.
• With a beta of 0.94, the stock is slightly less volatile than the broader market, making it a relatively stable choice for long-term investors.

While MMC may not be considered undervalued, investors looking for consistency rather than deep discounts may still find it attractive. The company’s steady stock performance, combined with its strong dividend history, makes it a compelling long-term holding.

Risks and Considerations

No stock is without risks, and MMC is no exception. Here are some factors that investors should keep in mind:

1. The stock is trading at a premium valuation, which could limit upside potential in the short term.
2. MMC’s financial services business is indirectly influenced by interest rate changes, which could impact its consulting and insurance brokerage segments.
3. The company carries a relatively high amount of debt, with total debt exceeding $21.86 billion. If cash flow were to weaken, debt servicing could become a bigger concern.
4. While insurance and risk consulting services tend to be resilient, MMC’s business is still tied to corporate spending. A major economic downturn could impact client demand.

While these risks are worth considering, MMC’s strong fundamentals and history of financial discipline help mitigate long-term concerns.

Final Thoughts

Marsh & McLennan isn’t a stock that dividend investors flock to for high yields, but it is one that rewards patient investors with consistency. Its ability to steadily grow dividends while maintaining a strong balance sheet makes it an attractive choice for those who prioritize long-term stability over immediate income.

With a manageable payout ratio, reliable cash flow, and a strong track record of dividend increases, MMC is a dependable dividend growth stock. The valuation is on the higher side, but for investors who value financial strength, consistent earnings, and a well-established business, it remains a solid option for a long-term portfolio.