Head to Head Survey: Tiptree Financial (NASDAQ:TIPT) vs. Marsh & McLennan Companies (NYSE:MMC)

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

Valuation and Earnings

This table compares Tiptree Financial and Marsh & McLennan Companies”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tiptree Financial	$2.04 billion	0.36	$53.37 million	$1.10	17.47
Marsh & McLennan Companies	$26.45 billion	3.39	$4.06 billion	$8.34	21.92

Marsh & McLennan Companies has higher revenue and earnings than Tiptree Financial. Tiptree Financial 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.

Analyst Ratings

This is a breakdown of current ratings and target prices for Tiptree Financial and Marsh & McLennan Companies, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tiptree Financial	0	0	1	0	3.00
Marsh & McLennan Companies	1	10	7	0	2.33

Marsh & McLennan Companies has a consensus price target of $228.63, suggesting a potential upside of 25.04%. Given Marsh & McLennan Companies’ higher possible upside, analysts plainly believe Marsh & McLennan Companies is more favorable than Tiptree Financial.

Volatility & Risk

Tiptree Financial has a beta of 1.14, suggesting that its stock price is 14% more volatile than the S&P 500. Comparatively, Marsh & McLennan Companies has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500.

Institutional & Insider Ownership

37.8% of Tiptree Financial shares are held by institutional investors. Comparatively, 88.0% of Marsh & McLennan Companies shares are held by institutional investors. 32.7% of Tiptree Financial shares are held by insiders. Comparatively, 0.4% of Marsh & McLennan Companies shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Dividends

Tiptree Financial pays an annual dividend of $0.24 per share and has a dividend yield of 1.2%. Marsh & McLennan Companies pays an annual dividend of $3.60 per share and has a dividend yield of 2.0%. Tiptree Financial pays out 21.8% of its earnings in the form of a dividend. Marsh & McLennan Companies pays out 43.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Tiptree Financial has increased its dividend for 2 consecutive years and Marsh & McLennan Companies has increased its dividend for 15 consecutive years. Marsh & McLennan Companies is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Tiptree Financial and Marsh & McLennan Companies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tiptree Financial	2.44%	14.30%	1.67%
Marsh & McLennan Companies	15.60%	31.79%	8.14%

Summary

Marsh & McLennan Companies beats Tiptree Financial on 13 of the 17 factors compared between the two stocks.

About Tiptree Financial

Tiptree Inc., through its subsidiaries, provides specialty insurance products and related services primarily in the United States. It operates through two segments: Insurance and Mortgage. The company offers niche; commercial lines insurance products, including professional liability, general liability, contractual liability protection, property and other short-tail, and alternative risks insurance products; and personal lines insurance products, such as credit protection surrounding loan payments. It also provides auto and consumer warranty programs, including mobile devices, consumer electronics, appliances, furniture; and vehicle service contracts, GAP, and ancillary products; as well as premium or warranty contract financing services, lead generation support, and business process outsourcing services. In addition, the company offers mortgage loans for institutional investors; asset management services; and maritime shipping and asset management services, as well as invests in shares. It markets its products through a network of independent insurance agents, consumer finance companies, online retailers, auto dealers, and regional big box retailers. The company was formerly known as Tiptree Financial Inc. and changed its name to Tiptree Inc. in December 2016. Tiptree Inc. was founded in 1978 and is headquartered in Greenwich, Connecticut.

About Marsh & McLennan Companies

Marsh & McLennan Cos., Inc. is a professional services firm, which engages in offering clients advice and solutions in risk, strategy, and people. It operates through the Risk and Insurance Services, and Consulting segments. The Risk and Insurance Services segment is involved in risk management activities, as well as insurance and reinsurance broking and services. The Consulting segment offers health, wealth, and career solutions and products, and specialized management, strategic, economic, and brand consulting services. The company was founded by Henry W. Marsh and Donald R. McLennan in 1871 and is headquartered in New York, NY.