shares of Marsh & McLennan Companies, Inc. (NYSE:MMC) reached at $108.83 price level during last trade its distance from 20 days simple moving average was -3.53%, and its distance from 50 days simple moving average was -4.77% while it has a distance of -1.90% from the 200 days simple moving average. Marsh & McLennan (NYSE:MMC), the world’s leading professional services firm in the areas of risk, strategy and people, reported financial results for the fourth quarter and year ended December 31, 2020.
Dan Glaser, President and CEO, said: “2020 was a year like no other. I am proud of how our colleagues rose to the challenge, helping clients and one another and achieving impressive financial performance. We ended the year with a strong fourth quarter with positive underlying revenue growth. In 2020, we achieved revenue growth of 3% with underlying revenue growth of 1% and grew adjusted EPS 7%.
“We demonstrated our resilience as a company in 2020 and are well positioned for growth in 2021.”
Consolidated revenue in the fourth quarter of 2020 was $4.4 billion, an increase of 4% compared with the fourth quarter of 2019, or 1% on an underlying basis. Operating income was $571 million compared with $592 million in the prior year period. Adjusted operating income, which excludes noteworthy items as presented in the attached supplemental schedules, was $855 million, compared with $856 million in the prior year period. Net income attributable to the Company was $374 million, or $0.73 per diluted share, compared with $0.76 in the fourth quarter of 2019. Adjusted earnings per share was $1.19, compared with $1.19 for the prior year period.
For the year 2020, revenue was $17.2 billion, an increase of 3% compared with 2019, or 1% on an underlying basis. Operating income was $3.1 billion, while adjusted operating income rose 9% to $3.6 billion. Net income attributable to the Company was $2.0 billion. Earnings per share increased 16% to $3.94. Adjusted earnings per share increased 7% to $4.97 compared with $4.66 in 2019.
Risk & Insurance Services
Risk & Insurance Services revenue was $2.5 billion in the fourth quarter of 2020, an increase of 6%, or 3% on an underlying basis. Operating income was $463 million, compared with $365 million in the fourth quarter of 2019. Adjusted operating income decreased 5% to $525 million. For the year 2020, revenue was $10.3 billion, an increase of 8%, or 3% on an underlying basis. Operating income was $2.3 billion, compared to $1.8 billion in 2019. Adjusted operating income rose 14% to $2.6 billion.
Marsh’s revenue in the fourth quarter of 2020 was $2.4 billion, an increase of 7%, or 4% on an underlying basis. In U.S./Canada, underlying revenue rose 7%. International operations underlying revenue was flat compared to the prior year period, reflecting underlying growth of 3% in Latin America and 1% in Asia Pacific, and partially offset by a decline of 2% in EMEA. For the year 2020, Marsh’s revenue growth was 7%, or 3% on an underlying basis.
Guy Carpenter’s fourth quarter revenue was $162 million, an increase of 7%, or 5% on an underlying basis. For the year 2020, Guy Carpenter’s revenue grew 15% compared to a year ago, or 6% on an underlying basis.
Consulting revenue was $1.9 billion in the fourth quarter of 2020, an increase of 1%, or a decline of 1% on an underlying basis. Operating income declined to $179 million, compared with $336 million in the fourth quarter of 2019, primarily due to a provision for a legacy JLT E&O. Adjusted operating income was $387 million, an increase of 8% compared with $359 million in the fourth quarter of 2019. For the year 2020, revenue was $7.0 billion, a decrease of 2% on both a GAAP and underlying basis. Operating income was $1.0 billion, compared with $1.2 billion in 2019. Adjusted operating income decreased 2% to $1.2 billion.
Mercer’s revenue was $1.3 billion in the fourth quarter of 2020, a decrease of 1%, or a 3% decline on an underlying basis. Wealth, with revenue of $629 million, decreased 1% on an underlying basis. Health, with revenue of $445 million, decreased 2% on an underlying basis. Career revenue of $238 million decreased 7% on an underlying basis. For the year 2020, Mercer’s revenue declined 2%, or 1% on an underlying basis.
Oliver Wyman’s revenue was $590 million in the fourth quarter of 2020, an increase of 4% on an underlying basis. For the year 2020, Oliver Wyman’s revenue was $2.0 billion, a decline of 4% on an underlying basis.
In December, Marsh & McLennan Agency (MMA) closed the acquisitions of independent agencies INSPRO, Heritage Insurance Service, Inc., and Compass Financial Partners. For the year 2020, MMA achieved a record year of acquisitions, completing eight transactions with approximately $235 million of combined revenue, marking the largest year of acquired revenue since it was started in 2009.
During the fourth quarter of 2020, the Company repaid $700 million of senior notes and prepaid $300 million of floating rate notes due December 2021.
Past 5 years growth of MMC observed at 5.60%, and for the next five years the analysts that follow this company are expecting its growth at 7.34%. The average true range (ATR) is a measure of volatility introduced by Welles Wilder in his book, “New Concepts in Technical Trading Systems.” The true range indicator is the greatest of the following: current high less the current low, the absolute value of the current high less the previous close and the absolute value of the current low less the previous close. The average true range is a moving average, generally 14 days, of the true ranges.
The stock has a market cap of $55.35B with 507.00M shares outstanding, of which the float was 506.63M shares. Analysts consider this stock active, since it switched Trading volume reached 2,144,264 shares as compared to its average volume of 1.78M shares. The Average Daily Trading Volume (ADTV) demonstrates trading activity related to the liquidity of the security. When Ave Volume tends to increase, it shows enhanced liquidity.
But when Ave Volume is lower, the security will tend to be cheap as people are not as keen to purchase it. Hence, it might have an effect on the worth of the security. MMC’s relative volume was 1.20. Relative volume is a great indicator to keep a close eye on, but like most indicators it works best in conjunction with other indicators and on different time frames. Higher relative volume you will have more liquidity in the stock which will tighten spreads and allow you to trade with more size without a ton of slippage.
Important Technical Indicators Analysis Report and Volatility Measures:
Beta is a measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole. Beta is used in the capital asset pricing model (CAPM), which calculates the predictable return of an asset based on its beta and predictable market returns. Beta is also known as the beta coefficient.
A beta of 1 indicates that the security’s price moves with the market. A beta of less than 1 means that the security is theoretically less volatile than the market. A beta of greater than 1 indicates that the security’s price is theoretically more volatile than the market. After a recent check, beta value for this stock comes out to be 0.84. A statistical measure of the dispersion of returns (volatility) for MMC producing salvation in Investors mouth, it has week volatility of 2.21% and for the month booked as 1.90%. Regardless of which metric you utilize, a firm understanding of the concept of volatility and how it is measured is essential to successful investing. A stock that maintains a relatively stable price has low volatility. When investing in a volatile security, the risk of success is increased just as much as the risk of failure.
The volatility value is used by the investors for various reasons and purposes in measuring the fundamental price change and the rate of variation in MMC’s price. The ART is a specific type of indicator, which is capable of weighing up stock volatility in the financial markets effectively.
Marsh & McLennan Companies, Inc. has an average true range (ATR) of 2.21. Other technical indicators are worth considering in assessing the prospects for EQT. MMC’s price to sales ratio for trailing twelve months was 3.24 and price to book ratio for most recent quarter was 6.42, whereas price to cash per share for the most recent quarter was 23.18. The Company’s price to free cash flow for trailing twelve months was 32.24. Its quick ratio for most recent quarter was 1.30. Analysts mean recommendation for the stock was 2.80. This number is based on a 1 to 5 scale where 1 indicates a Strong Buy recommendation while 5 represents a Strong Sell.
Should You Go With High Insider Ownership?
Many value investors look for stocks with a high percent of insider ownership, under the theory that when management are shareholders, they will act in its own self interest, and create shareholder value in the long-term. This aligns the interests of shareholders with management, thus benefiting everyone. While this sounds great in theory, high insider ownership can actually lead to the opposite result, a management team that is unaccountable because they can keep their jobs under almost any circumstance.
Marsh & McLennan Companies, Inc.‘s shares owned by insiders remained 0.20%, whereas shares owned by institutional owners are 89.70%.
Where Do Relative Strength Index (RSI) Stands?
Perhaps, it is one of the most important indicators, because it is used in the technical analysis of the stock in the money market. The relative strength index (RSI) is claimed to depict the latest and past performances of the stock market, based upon the ending price volumes of the current trading period. The RSI is characterized as a momentum oscillator, evaluating the speed and scale of directional price shifts. The momentum exemplifies both rising and falling rates of the Price in the stock market. Using RSI, you can calculate momentum as the percentage of elevated closes to reduced closes. But if the stocks have experienced optimistic changes rapidly, then it might have an increased RSI than stocks. So, it might cause negative changes in the market.
The RSI index is largely used by traders on a 14-day time period and is evaluated on a range from 0 to 100, along with both high and low volumes marked at 70 and 30, correspondingly. Both the shorter and longer timeframes are used by the traders for shorter and longer purposes. It further adds high and low ranges like from 80 to 20 and from 90 to 10. This trend takes place less repeatedly.
However, it represents stronger momentum in the market. In the meantime, the Accenture plc’s 14-day RSI was settled at 36.54. All in all, the trends of the stock market were shifting slowly but surely.
Meanwhile, MMC traded under umbrella of Financial sector, the stock was traded -10.04% ahead of its 52-week high and 46.40% beyond its 52-week low. So, both the price and 52-week high indicators would give you a clear-cut picture to evaluate the price direction.