The Board of Directors of Marsh & McLennan Companies, Inc. (NYSE:MMC) recently authorized an increase in the company’s share repurchase program. Management can now repurchase up to $2.5 billion of the company’s common stock.
The company focuses on retaining investor confidence on the stock. Hence, enhancing shareholders’ value through effective capital deployment is an important strategy of Marsh & McLennan.
The company deployed $3.2 billion in 2015 for share buybacks, dividend payments and acquisitions. This is 39% higher than $2.3 billion spent in 2014 and 92% higher than $1.2 billion deployed in 2013. The company has been reducing its outstanding share count over the last ten consecutive quarters in order to boost the bottom line.
During the first nine months of 2016, Marsh & McLennan spent a total of $625 million to buy back 10 million of its common stocks. The third quarter of 2016 was the 18th consecutive quarter of share repurchases by the company.
We note that dividend payment is another major capital deployment strategy of Marsh & McLennan. The company started paying dividends since 2006 and has been raising its dividend by a comfortable percentage every year. In fact, the latest 9.7% hike in dividends marks 2016 as the 10th consecutive year of dividend increases by the company.
By the end of 2016, Marsh & McLennan expects to deploy nearly $2.3 billion of capital through dividends, share repurchases and acquisitions. It also plans to deliver on its annual capital return commitment to reduce share count and increase dividend per share by double digits.
MARSH &MCLENNAN Price
Zacks Rank and Stocks to Consider
Marsh & McLennan presently carries Zacks Rank #3 (Hold).
Investors can also look at better-ranked stocks from the insurance space like Health Insurance Innovations, Inc. (NASDAQ:HIIQ) , Lincoln National Corp. (NYSE:LNC) and Universal American Corp (NYSE:UAM) . While Health Insurance Innovations sports a Zacks Rank #1 (Strong Buy), the other two carry Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.
Health Insurance Innovations delivered positive earnings surprise over last four quarters with an average substantial beta of 270.84%
On the other hand, Universal American delivered negative surprise in two of the last four quarters with an average miss of 231.25%.
Similar to Universal American, Lincoln National also delivered negative surprise in two of the last four quarters with an average miss of 0.81%.
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