Marsh & McLennan Companies, Inc. (MMC): A Bull Case Theory

We came across a bullish thesis on Marsh & McLennan Companies, Inc. on r/valueinvesting by Key_Variety_6287. In this article, we will summarize the bulls’ thesis on MMC. Marsh & McLennan Companies, Inc.’s share was trading at $182.70 as of January 15th. MMC’s trailing and forward P/E were 21.85 and 17.57 respectively according to Yahoo Finance.

Marsh McLennan (MMC) is a leading player in the insurance brokerage industry, connecting large organizations with insurers without assuming underwriting risk itself. The company earns a percentage of premiums as commission, making it highly asset-light, and benefits from sticky client relationships driven by moderate switching costs and minimal benefit to changing brokers. Approximately 75% of MMC’s revenue comes from this core brokerage business, which enjoys a strong moat, while the remaining 25% is derived from its consulting arm, which lacks the same defensive advantages.

Recent investor concern has centered on moderating insurance premiums following years of rapid increases, raising fears that commission growth may slow. However, insurance pricing is inherently cyclical, and over the long term, premiums are expected to rise as the underlying cost of risk increases globally. This structural growth underpins the long-term earnings potential of MMC. At the current stock price, the company offers an attractive free cash flow yield of over 5%, with projected earnings growth of roughly 7% CAGR driven by a combination of pricing, volume growth, and reinvestment returns.

Valuation multiples remain below historical averages, with EV/EBIT at 16 compared with a 10-year mean of around 18, suggesting the market is not fully accounting for the stability and long-term growth of the business. Overall, MMC presents a compelling investment opportunity: a highly profitable, asset-light business with sticky client relationships, resilient long-term growth prospects, and an undervalued stock that could deliver above-average returns of 12% to 15% CAGR over the long term.

Previously, we covered a bullish thesis on Brown & Brown, Inc. (BRO) by Bulls On Parade in April 2025, highlighting its consistent organic growth, disciplined acquisitions, and strong client relationships. BRO’s stock has depreciated by approximately 32.90% since due to market weakness and insurance premium concerns. Key_Variety_6287 shares a similar view on Marsh & McLennan Companies, Inc. (MMC) but emphasizes its asset-light model and long-term growth potential.

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Disclosure: None.