Comparing Marsh & McLennan Companies (MMC) & Patriot National (PN)

Marsh & McLennan Companies (NYSE: MMC) and Patriot National (NYSE:PN) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, profitability, earnings, dividends, valuation, risk and institutional ownership.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Marsh & McLennan Companies and Patriot National, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Marsh & McLennan Companies 0 4 8 0 2.67
Patriot National 0 2 0 0 2.00

Marsh & McLennan Companies presently has a consensus target price of $82.50, suggesting a potential downside of 1.19%. Patriot National has a consensus target price of $7.75, suggesting a potential upside of 652.43%. Given Patriot National’s higher probable upside, analysts clearly believe Patriot National is more favorable than Marsh & McLennan Companies.

Volatility and Risk

Marsh & McLennan Companies has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500. Comparatively, Patriot National has a beta of 2.75, suggesting that its stock price is 175% more volatile than the S&P 500.

Profitability

This table compares Marsh & McLennan Companies and Patriot National’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Marsh & McLennan Companies 13.97% 28.56% 10.18%
Patriot National N/A N/A N/A

Valuation & Earnings

This table compares Marsh & McLennan Companies and Patriot National’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Marsh & McLennan Companies $13.50 billion 3.17 $3.23 billion $3.62 23.06
Patriot National $233.03 million 0.12 $31.71 million ($0.02) -51.50

Marsh & McLennan Companies has higher revenue and earnings than Patriot National. Patriot National is trading at a lower price-to-earnings ratio than Marsh & McLennan Companies, indicating that it is currently the more affordable of the two stocks.

Dividends

Marsh & McLennan Companies pays an annual dividend of $1.50 per share and has a dividend yield of 1.8%. Patriot National does not pay a dividend. Marsh & McLennan Companies pays out 41.4% of its earnings in the form of a dividend. Patriot National has increased its dividend for 7 consecutive years.

Insider and Institutional Ownership

84.8% of Marsh & McLennan Companies shares are owned by institutional investors. Comparatively, 13.3% of Patriot National shares are owned by institutional investors. 1.5% of Marsh & McLennan Companies shares are owned by company insiders. Comparatively, 59.9% of Patriot National shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Marsh & McLennan Companies beats Patriot National on 12 of the 17 factors compared between the two stocks.

Marsh & McLennan Companies Company Profile

Marsh & McLennan Companies, Inc. is a professional services firm offering clients advice and solutions in risk, strategy and people. The Company is the parent company of various risk advisors and specialty consultants, including Marsh, the insurance broker; Guy Carpenter, the risk and reinsurance specialist; Mercer, the provider of human resource and investment related financial advice and services, and Oliver Wyman Group, the management and economic consultancy. It conducts business through two segments: Risk and Insurance Services, which includes risk management activities, as well as insurance and reinsurance broking and services, and Consulting includes health, retirement, talent and investments consulting services and products, and specialized management, economic and brand consulting services. It conducts business in the Risk and Insurance Services segment through Marsh and Guy Carpenter. It conducts business in the Consulting segment through Mercer and Oliver Wyman Group.

Patriot National Company Profile

Patriot National, Inc. is an independent national provider of technology-enabled outsourcing solutions that help insurance carriers, employers and other clients mitigate risk and comply with complex regulations. It offers a range of end-to-end insurance related and specialty services. The Company principally offers approximately two types of services: front-end services, such as brokerage, underwriting and policyholder services, and back-end services, such as claims adjudication and administration. It also offers specialty services, including technology outsourcing and other information technology (IT) services, as well as employment pre-screening and background checks. The Company’s brokerage and policyholder services include general agency services and specialty underwriting and policyholder services provided to its insurance carrier clients. The Company’s claims administration services relate to the administration and resolution of workers’ compensation claims.

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