WILLIS TOWERS WATSON PLC (WTW) Stock Fundamental Analysis
USA - NASDAQ:WTW - IE00BDB6Q211 - Common Stock
332.33 USD
+1.61 (+0.49%)
333.49 USD
+1.16 (+0.35%)
WTW gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 146 industry peers in the Insurance industry. Both the profitability and the financial health of WTW get a neutral evaluation. Nothing too spectacular is happening here. WTW is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year WTW was profitable.
In the past year WTW had a positive cash flow from operations.
Of the past 5 years WTW 4 years were profitable.
In the past 5 years WTW always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of WTW (0.48%) is worse than 69.86% of its industry peers.
WTW has a worse Return On Equity (1.69%) than 80.14% of its industry peers.
WTW has a better Return On Invested Capital (11.93%) than 96.58% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for WTW is above the industry average of 4.47%.
The 3 year average ROIC (8.90%) for WTW is below the current ROIC(11.93%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.48% | ||
| ROE | 1.69% | ||
| ROIC | 11.93% |
ROA(3y)2.15%
ROA(5y)4.22%
ROE(3y)6.64%
ROE(5y)12.19%
ROIC(3y)8.9%
ROIC(5y)7.27%
1.3 Margins
The Profit Margin of WTW (1.40%) is worse than 79.45% of its industry peers.
WTW has a Operating Margin of 22.49%. This is amongst the best in the industry. WTW outperforms 86.30% of its industry peers.
In the last couple of years the Operating Margin of WTW has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 22.49% | ||
| PM (TTM) | 1.4% | ||
| GM | N/A |
OM growth 3Y10.88%
OM growth 5Y11.06%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
WTW has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, WTW has less shares outstanding
Compared to 5 years ago, WTW has less shares outstanding
WTW has a worse debt/assets ratio than last year.
2.2 Solvency
WTW has an Altman-Z score of 1.62. This is a bad value and indicates that WTW is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of WTW (1.62) is better than 86.30% of its industry peers.
WTW has a debt to FCF ratio of 4.50. This is a neutral value as WTW would need 4.50 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 4.50, WTW is in line with its industry, outperforming 41.10% of the companies in the same industry.
WTW has a Debt/Equity ratio of 0.59. This is a neutral value indicating WTW is somewhat dependend on debt financing.
WTW has a Debt to Equity ratio of 0.59. This is in the lower half of the industry: WTW underperforms 78.08% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.59 | ||
| Debt/FCF | 4.5 | ||
| Altman-Z | 1.62 |
ROIC/WACC1.41
WACC8.45%
2.3 Liquidity
WTW has a Current Ratio of 1.13. This is a normal value and indicates that WTW is financially healthy and should not expect problems in meeting its short term obligations.
WTW has a better Current ratio (1.13) than 80.14% of its industry peers.
A Quick Ratio of 1.13 indicates that WTW should not have too much problems paying its short term obligations.
WTW has a better Quick ratio (1.13) than 80.14% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.13 | ||
| Quick Ratio | 1.13 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 9.86% over the past year.
The Earnings Per Share has been growing by 9.03% on average over the past years. This is quite good.
Looking at the last year, WTW shows a small growth in Revenue. The Revenue has grown by 1.26% in the last year.
Measured over the past years, WTW shows a small growth in Revenue. The Revenue has been growing by 3.48% on average per year.
EPS 1Y (TTM)9.86%
EPS 3Y7.25%
EPS 5Y9.03%
EPS Q2Q%12.16%
Revenue 1Y (TTM)1.26%
Revenue growth 3Y3.34%
Revenue growth 5Y3.48%
Sales Q2Q%-0.18%
3.2 Future
The Earnings Per Share is expected to grow by 9.39% on average over the next years. This is quite good.
Based on estimates for the next years, WTW will show a small growth in Revenue. The Revenue will grow by 2.99% on average per year.
EPS Next Y1.13%
EPS Next 2Y7.2%
EPS Next 3Y9.4%
EPS Next 5Y9.39%
Revenue Next Year-2.87%
Revenue Next 2Y1.32%
Revenue Next 3Y2.78%
Revenue Next 5Y2.99%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 19.49, the valuation of WTW can be described as rather expensive.
Compared to the rest of the industry, the Price/Earnings ratio of WTW indicates a slightly more expensive valuation: WTW is more expensive than 67.81% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.20, WTW is valued a bit cheaper.
A Price/Forward Earnings ratio of 17.11 indicates a rather expensive valuation of WTW.
Based on the Price/Forward Earnings ratio, WTW is valued a bit more expensive than 65.75% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.70, WTW is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.49 | ||
| Fwd PE | 17.11 |
4.2 Price Multiples
WTW's Enterprise Value to EBITDA ratio is in line with the industry average.
Based on the Price/Free Cash Flow ratio, WTW is valued a bit more expensive than 65.07% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.5 | ||
| EV/EBITDA | 13.58 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
PEG (NY)17.31
PEG (5Y)2.16
EPS Next 2Y7.2%
EPS Next 3Y9.4%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.13%, WTW has a reasonable but not impressive dividend return.
WTW's Dividend Yield is comparable with the industry average which is at 3.43.
Compared to an average S&P500 Dividend Yield of 2.38, WTW's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.13% |
5.2 History
On average, the dividend of WTW grows each year by 6.49%, which is quite nice.
WTW has been paying a dividend for at least 10 years, so it has a reliable track record.
As WTW did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)6.49%
Div Incr Years8
Div Non Decr Years8
5.3 Sustainability
260.58% of the earnings are spent on dividend by WTW. This is not a sustainable payout ratio.
WTW's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP260.58%
EPS Next 2Y7.2%
EPS Next 3Y9.4%
332.33
+1.61 (+0.49%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners96.41%
Inst Owner Change0%
Ins Owners0.28%
Ins Owner Change-4.18%
Market Cap32.42B
Analysts75.38
Price Target369.41 (11.16%)
Short Float %2.83%
Short Ratio4.45
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.13% |
Yearly Dividend3.5
Dividend Growth(5Y)6.49%
DP260.58%
Div Incr Years8
Div Non Decr Years8
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)3.04%
Min EPS beat(2)-2.96%
Max EPS beat(2)9.03%
EPS beat(4)3
Avg EPS beat(4)3.31%
Min EPS beat(4)-2.96%
Max EPS beat(4)9.03%
EPS beat(8)6
Avg EPS beat(8)4.18%
EPS beat(12)9
Avg EPS beat(12)2.03%
EPS beat(16)13
Avg EPS beat(16)2.56%
Revenue beat(2)1
Avg Revenue beat(2)-1.42%
Min Revenue beat(2)-3.05%
Max Revenue beat(2)0.22%
Revenue beat(4)1
Avg Revenue beat(4)-1.39%
Min Revenue beat(4)-3.05%
Max Revenue beat(4)0.22%
Revenue beat(8)2
Avg Revenue beat(8)-1.01%
Revenue beat(12)4
Avg Revenue beat(12)-0.84%
Revenue beat(16)4
Avg Revenue beat(16)-1.79%
PT rev (1m)0.4%
PT rev (3m)-0.54%
EPS NQ rev (1m)0.94%
EPS NQ rev (3m)2.09%
EPS NY rev (1m)1.82%
EPS NY rev (3m)1.78%
Revenue NQ rev (1m)-0.22%
Revenue NQ rev (3m)0.17%
Revenue NY rev (1m)0.31%
Revenue NY rev (3m)0.32%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.49 | ||
| Fwd PE | 17.11 | ||
| P/S | 3.31 | ||
| P/FCF | 27.5 | ||
| P/OCF | 23.04 | ||
| P/B | 4 | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.58 |
EPS(TTM)17.05
EY5.13%
EPS(NY)19.42
Fwd EY5.84%
FCF(TTM)12.09
FCFY3.64%
OCF(TTM)14.42
OCFY4.34%
SpS100.54
BVpS83.03
TBVpS-21.22
PEG (NY)17.31
PEG (5Y)2.16
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.48% | ||
| ROE | 1.69% | ||
| ROCE | 15.1% | ||
| ROIC | 11.93% | ||
| ROICexc | 13.78% | ||
| ROICexgc | 70.44% | ||
| OM | 22.49% | ||
| PM (TTM) | 1.4% | ||
| GM | N/A | ||
| FCFM | 12.02% |
ROA(3y)2.15%
ROA(5y)4.22%
ROE(3y)6.64%
ROE(5y)12.19%
ROIC(3y)8.9%
ROIC(5y)7.27%
ROICexc(3y)9.9%
ROICexc(5y)8.3%
ROICexgc(3y)46.83%
ROICexgc(5y)41.54%
ROCE(3y)11.27%
ROCE(5y)9.2%
ROICexcg growth 3Y11.06%
ROICexcg growth 5Y19.69%
ROICexc growth 3Y21.06%
ROICexc growth 5Y22.92%
OM growth 3Y10.88%
OM growth 5Y11.06%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3YN/A
GM growth 5YN/A
F-Score7
Asset Turnover0.34
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.59 | ||
| Debt/FCF | 4.5 | ||
| Debt/EBITDA | 1.81 | ||
| Cap/Depr | 53.27% | ||
| Cap/Sales | 2.32% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 53.42% | ||
| Profit Quality | 860.58% | ||
| Current Ratio | 1.13 | ||
| Quick Ratio | 1.13 | ||
| Altman-Z | 1.62 |
F-Score7
WACC8.45%
ROIC/WACC1.41
Cap/Depr(3y)45.88%
Cap/Depr(5y)41.14%
Cap/Sales(3y)2.44%
Cap/Sales(5y)2.57%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)9.86%
EPS 3Y7.25%
EPS 5Y9.03%
EPS Q2Q%12.16%
EPS Next Y1.13%
EPS Next 2Y7.2%
EPS Next 3Y9.4%
EPS Next 5Y9.39%
Revenue 1Y (TTM)1.26%
Revenue growth 3Y3.34%
Revenue growth 5Y3.48%
Sales Q2Q%-0.18%
Revenue Next Year-2.87%
Revenue Next 2Y1.32%
Revenue Next 3Y2.78%
Revenue Next 5Y2.99%
EBIT growth 1Y12.44%
EBIT growth 3Y14.58%
EBIT growth 5Y14.92%
EBIT Next Year27.84%
EBIT Next 3Y14.47%
EBIT Next 5YN/A
FCF growth 1Y56.78%
FCF growth 3Y-12.01%
FCF growth 5Y10.3%
OCF growth 1Y42.99%
OCF growth 3Y-9.81%
OCF growth 5Y6.94%