WILLIS TOWERS WATSON PLC (WTW) Stock Fundamental Analysis
NASDAQ:WTW - Nasdaq - IE00BDB6Q211 - Common Stock - Currency: USD
Overall WTW gets a fundamental rating of 5 out of 10. We evaluated WTW against 145 industry peers in the Insurance industry. WTW has only an average score on both its financial health and profitability. WTW is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
WTW had positive earnings in the past year.
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
With a Return On Assets value of -0.19%, WTW is not doing good in the industry: 82.76% of the companies in the same industry are doing better.
Looking at the Return On Equity, with a value of -0.65%, WTW is doing worse than 82.07% of the companies in the same industry.
The Return On Invested Capital of WTW (11.56%) is better than 97.24% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for WTW is above the industry average of 4.07%.
The last Return On Invested Capital (11.56%) for WTW is above the 3 year average (8.90%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.19% | ||
| ROE | -0.65% | ||
| ROIC | 11.56% |
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
With an excellent Operating Margin value of 21.89%, WTW belongs to the best of the industry, outperforming 84.14% of the companies in the same industry.
In the last couple of years the Operating Margin of WTW has grown nicely.
The Profit Margin and Gross Margin are not available for WTW so they could not be analyzed.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.89% | ||
| PM (TTM) | N/A | ||
| 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so WTW is still creating some value.
The number of shares outstanding for WTW has been reduced compared to 1 year ago.
Compared to 5 years ago, WTW has less shares outstanding
The debt/assets ratio for WTW is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 1.62, we must say that WTW is in the distress zone and has some risk of bankruptcy.
With an excellent Altman-Z score value of 1.62, WTW belongs to the best of the industry, outperforming 88.28% of the companies in the same industry.
WTW has a debt to FCF ratio of 4.36. This is a neutral value as WTW would need 4.36 years to pay back of all of its debts.
WTW's Debt to FCF ratio of 4.36 is on the low side compared to the rest of the industry. WTW is outperformed by 63.45% of its industry peers.
WTW has a Debt/Equity ratio of 0.59. This is a neutral value indicating WTW is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.59, WTW is not doing good in the industry: 75.17% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.59 | ||
| Debt/FCF | 4.36 | ||
| Altman-Z | 1.62 |
ROIC/WACC1.37
WACC8.41%
2.3 Liquidity
A Current Ratio of 1.16 indicates that WTW should not have too much problems paying its short term obligations.
WTW's Current ratio of 1.16 is amongst the best of the industry. WTW outperforms 83.45% of its industry peers.
WTW has a Quick Ratio of 1.16. 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 Quick ratio of 1.16. This is amongst the best in the industry. WTW outperforms 83.45% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.16 | ||
| Quick Ratio | 1.16 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 11.45% over the past year.
Measured over the past years, WTW shows a quite strong growth in Earnings Per Share. The EPS has been growing by 9.03% on average per year.
WTW shows a small growth in Revenue. In the last year, the Revenue has grown by 2.42%.
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)11.45%
EPS 3Y7.25%
EPS 5Y9.03%
EPS Q2Q%-4.86%
Revenue 1Y (TTM)2.42%
Revenue growth 3Y3.34%
Revenue growth 5Y3.48%
Sales Q2Q%-5.04%
3.2 Future
Based on estimates for the next years, WTW will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.39% on average per year.
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 Y-0.7%
EPS Next 2Y6.44%
EPS Next 3Y8.89%
EPS Next 5Y9.39%
Revenue Next Year-3.18%
Revenue Next 2Y1.1%
Revenue Next 3Y2.53%
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
With a Price/Earnings ratio of 18.36, WTW is valued on the expensive side.
64.14% of the companies in the same industry are cheaper than WTW, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 27.30, WTW is valued a bit cheaper.
The Price/Forward Earnings ratio is 16.05, which indicates a correct valuation of WTW.
WTW's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. WTW is more expensive than 64.83% of the companies in the same industry.
WTW is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.76, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.36 | ||
| Fwd PE | 16.05 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of WTW is on the same level as its industry peers.
Based on the Price/Free Cash Flow ratio, WTW is valued a bit more expensive than 70.34% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.04 | ||
| EV/EBITDA | 13.34 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)2.03
EPS Next 2Y6.44%
EPS Next 3Y8.89%
5. Dividend
5.1 Amount
WTW has a Yearly Dividend Yield of 1.20%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.64, WTW has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.37, WTW's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.2% |
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
The earnings of WTW are negative and hence is the payout ratio. WTW will probably not be able to sustain this dividend level.
WTW's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP-671.7%
EPS Next 2Y6.44%
EPS Next 3Y8.89%
307.32
-2.5 (-0.81%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners95.98%
Inst Owner Change0%
Ins Owners0.28%
Ins Owner Change4.36%
Market Cap30.47B
Analysts76.67
Price Target371.85 (21%)
Short Float %1.37%
Short Ratio2.08
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.2% |
Yearly Dividend3.5
Dividend Growth(5Y)6.49%
DP-671.7%
Div Incr Years8
Div Non Decr Years8
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-1.34%
Min EPS beat(2)-2.96%
Max EPS beat(2)0.27%
EPS beat(4)3
Avg EPS beat(4)3.09%
Min EPS beat(4)-2.96%
Max EPS beat(4)8.14%
EPS beat(8)5
Avg EPS beat(8)1.45%
EPS beat(12)9
Avg EPS beat(12)1.28%
EPS beat(16)13
Avg EPS beat(16)4.03%
Revenue beat(2)0
Avg Revenue beat(2)-2.45%
Min Revenue beat(2)-3.05%
Max Revenue beat(2)-1.84%
Revenue beat(4)0
Avg Revenue beat(4)-1.78%
Min Revenue beat(4)-3.05%
Max Revenue beat(4)-0.87%
Revenue beat(8)2
Avg Revenue beat(8)-0.98%
Revenue beat(12)3
Avg Revenue beat(12)-1.11%
Revenue beat(16)3
Avg Revenue beat(16)-2.24%
PT rev (1m)-0.39%
PT rev (3m)-0.01%
EPS NQ rev (1m)0.01%
EPS NQ rev (3m)-4.66%
EPS NY rev (1m)-0.05%
EPS NY rev (3m)-1.72%
Revenue NQ rev (1m)-0.09%
Revenue NQ rev (3m)-0.22%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.51%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.36 | ||
| Fwd PE | 16.05 | ||
| P/S | 3.11 | ||
| P/FCF | 25.04 | ||
| P/OCF | 20.97 | ||
| P/B | 3.75 | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.34 |
EPS(TTM)16.74
EY5.45%
EPS(NY)19.15
Fwd EY6.23%
FCF(TTM)12.27
FCFY3.99%
OCF(TTM)14.65
OCFY4.77%
SpS98.96
BVpS82.03
TBVpS-19.8
PEG (NY)N/A
PEG (5Y)2.03
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.19% | ||
| ROE | -0.65% | ||
| ROCE | 14.63% | ||
| ROIC | 11.56% | ||
| ROICexc | 12.88% | ||
| ROICexgc | 55.15% | ||
| OM | 21.89% | ||
| PM (TTM) | N/A | ||
| GM | N/A | ||
| FCFM | 12.4% |
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-Score6
Asset Turnover0.35
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.59 | ||
| Debt/FCF | 4.36 | ||
| Debt/EBITDA | 1.84 | ||
| Cap/Depr | 53.76% | ||
| Cap/Sales | 2.41% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 56.17% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.16 | ||
| Quick Ratio | 1.16 | ||
| Altman-Z | 1.62 |
F-Score6
WACC8.41%
ROIC/WACC1.37
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)11.45%
EPS 3Y7.25%
EPS 5Y9.03%
EPS Q2Q%-4.86%
EPS Next Y-0.7%
EPS Next 2Y6.44%
EPS Next 3Y8.89%
EPS Next 5Y9.39%
Revenue 1Y (TTM)2.42%
Revenue growth 3Y3.34%
Revenue growth 5Y3.48%
Sales Q2Q%-5.04%
Revenue Next Year-3.18%
Revenue Next 2Y1.1%
Revenue Next 3Y2.53%
Revenue Next 5Y2.99%
EBIT growth 1Y13.35%
EBIT growth 3Y14.58%
EBIT growth 5Y14.92%
EBIT Next Year26.6%
EBIT Next 3Y14.31%
EBIT Next 5YN/A
FCF growth 1Y72.38%
FCF growth 3Y-12.01%
FCF growth 5Y10.3%
OCF growth 1Y57.08%
OCF growth 3Y-9.81%
OCF growth 5Y6.94%