As of May 28, 2025, Marsh & McLennan Companies Inc's estimated intrinsic value ranges from $186.50 to $258.75 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $258.75 | +11.8% |
| Discounted Cash Flow (5Y) | $234.59 | +1.3% |
| Dividend Discount Model (Multi-Stage) | $186.50 | -19.4% |
| Dividend Discount Model (Stable) | $195.78 | -15.4% |
| Earnings Power Value | $193.49 | -16.4% |
Is Marsh & McLennan Companies Inc (MMC) undervalued or overvalued?
With the current market price at $231.53, the stock appears to be fairly valued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Marsh & McLennan Companies Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.57 | 0.58 |
| Cost of equity | 6.5% | 8.1% |
| Cost of debt | 4.1% | 4.6% |
| Tax rate | 24.5% | 24.7% |
| Debt/Equity ratio | 0.18 | 0.18 |
| After-tax WACC | 6.0% | 7.4% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $235 | $134,513M | 84.2% |
| 10-Year Growth | $259 | $146,419M | 71.1% |
| 5-Year EBITDA | $83 | $59,981M | 64.5% |
| 10-Year EBITDA | $118 | $76,920M | 45.1% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $7,567M |
| Discount Rate (WACC) | 7.4% - 6.0% |
| Enterprise Value | $101,883M - $126,641M |
| Net Debt | $18,925M |
| Equity Value | $82,958M - $107,716M |
| Outstanding Shares | 493M |
| Fair Value | $168 - $219 |
| Selected Fair Value | $193.49 |
| Metric | Value |
|---|---|
| Market Capitalization | $114082M |
| Enterprise Value | $133007M |
| Trailing P/E | 28.23 |
| Forward P/E | 25.52 |
| Trailing EV/EBITDA | 6.30 |
| Current Dividend Yield | 138.41% |
| Dividend Growth Rate (5Y) | 12.55% |
| Debt-to-Equity Ratio | 0.18 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $77.63 |
| Discounted Cash Flow (5Y) | 25% | $58.65 |
| Dividend Discount Model (Multi-Stage) | 20% | $37.30 |
| Dividend Discount Model (Stable) | 15% | $29.37 |
| Earnings Power Value | 10% | $19.35 |
| Weighted Average | 100% | $222.29 |
Based on our comprehensive valuation analysis, Marsh & McLennan Companies Inc's weighted average intrinsic value is $222.29, which is approximately 4.0% below the current market price of $231.53.
Key investment considerations:
Given these factors, we believe Marsh & McLennan Companies Inc is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.