Its exchange business contributes 54% of revenue and 74% of operating margins. ICE has one of the widest network-effect businesses with significant pricing power. The company benefits from market volatility. ICE operates many of the premier electronic market exchanges for the energy complex, other commodities, fixed income, and equities. At a 16.5 multiple, the stock would trade for $125. We see ICE growing earnings per share 13% a year through 2025 and earning $7.50 per share. The stock is trading in the low-$90s, and we see it climbing to around $125 in three years.
#2017 turbotax return free full#
It’s buying good businesses that can compound over a full cycle. Our investment theme isn’t hiding in a bunker and putting on a crash helmet. We expect Marsh to come out of the pandemic and this inflationary cycle stronger. Managing new and emerging threats is right in Marsh’s wheelhouse. Cyberrisk has to be insured, as do weather-related issues and carbon impacts. Add a 1.5% dividend yield and that’s a low double-digit return.
At a 21 price/earnings multiple, that implies a $195 stock, compared with a recent price in the low $150s. Earnings could grow by 14% a year through 2025. Marsh & McLennan has 24% operating margins, and we think they can rise. Consulting accounts for 39% of sales, and that business includes Mercer, a leading wealth advisor, and Oliver Wyman. About 51% of revenue comes from Marsh, a leading brokerage, and 10% from Guy Carpenter, a specialist in reinsurance. The risk-management and insurance-services business is 61% of sales, and 29% of operating margins. The stock trades for 22 times the next 12 months’ earnings. It is the world’s leading insurance broker and risk adviser, and has demonstrated consistent growth through cycles. It has implemented new return-on-capital incentives for leaders, and the board has direct oversight on risks and opportunities from sustainability issues. It has separated the CEO and chairman roles, declassified the board, and is returning more capital to shareholders via stock buybacks. It is getting rid of more-cyclical and lower-margin businesses, and it has improved governance, which we like to see. It bought several non-core businesses, and is trimming them. The stock could command a multiple of 27 times on 2025 estimated earnings, and yields 0.7%. Earnings per share will grow at a 14% annual clip during this period. We see a 12% annualized return in the next 2.5 years, to $225 a share. Verisk is trading for about $170 a share. To give you a feel for the moat, Verisk maintains almost 30 billion statistical records with data spanning 50-plus years. Its data sets are mission-critical in helping the industry price and underwrite risk. is a data-analytics company for the insurance industry, which is at the beginning of a major wave of modernizing and moving to the cloud. 2021 Midyear Roundtable Report Card: How Our Experts’ Picks Have Done Since Last July.
#2017 turbotax return free update#
We can’t ignore things like slowing industrial production and weakening freight and shipping stats. The Fed’s policy may transition us to a different regime over the next three years, if not the next nine to 12 months. In addition, the strong deflationary forces we have had for more than a decade, including demographics, technology, and high debt levels, haven’t gone away but have merely taken a back seat for now. We have talked in the past about cloud computing, digital content creation, machine learning, life-sciences innovations, precision agriculture, autonomous driving, clean energy, and innovations in financial services. There is still remarkable innovation in our economy.
By then, the economic backdrop could look very different. But when the backdrop is overly bearish, it sets up an opportunity for the next three years. The pandemic stimulus is rolling off, and earnings-estimate reductions are coming. In the short term, it feels like we’re driving downhill with no brakes. Todd Ahlsten: It is a time of uncertainty, but also opportunity. Barron’s: It has been a dreadful six months in the markets.
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