WILLIS TOWERS WATSON PLC (WTW) Stock Fundamental Analysis
NASDAQ:WTW - Nasdaq - IE00BDB6Q211 - Common Stock
We assign a fundamental rating of 5 out of 10 to WTW. WTW was compared to 144 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.
WTW had positive earnings in each of the past 5 years.
Each year in the past 5 years WTW had a positive operating cash flow.
1.2 Ratios
WTW's Return On Assets of -2.66% is on the low side compared to the rest of the industry. WTW is outperformed by 90.14% of its industry peers.
WTW's Return On Equity of -9.64% is on the low side compared to the rest of the industry. WTW is outperformed by 85.92% of its industry peers.
Looking at the Return On Invested Capital, with a value of 11.64%, WTW belongs to the top of the industry, outperforming 95.07% of the companies in the same industry.
WTW had an Average Return On Invested Capital over the past 3 years of 7.45%. This is above the industry average of 4.61%.
The 3 year average ROIC (7.45%) for WTW is below the current ROIC(11.64%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -2.66% | ||
| ROE | -9.64% | ||
| ROIC | 11.64% |
ROA(3y)6.29%
ROA(5y)4.88%
ROE(3y)17.67%
ROE(5y)14.48%
ROIC(3y)7.45%
ROIC(5y)6.26%
1.3 Margins
In the last couple of years the Profit Margin of WTW has grown nicely.
The Operating Margin of WTW (20.71%) is better than 80.99% of its industry peers.
WTW's Operating Margin has improved in the last couple of years.
The Profit Margin and Gross Margin are not available for WTW so they could not be analyzed.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.71% | ||
| PM (TTM) | N/A | ||
| GM | N/A |
OM growth 3Y18.5%
OM growth 5Y10.06%
PM growth 3Y-1.27%
PM growth 5Y6.39%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), WTW is creating some value.
Compared to 1 year ago, WTW has less shares outstanding
The number of shares outstanding for WTW has been reduced compared to 5 years ago.
WTW has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.64, we must say that WTW is in the distress zone and has some risk of bankruptcy.
WTW has a better Altman-Z score (1.64) than 87.32% of its industry peers.
The Debt to FCF ratio of WTW is 4.48, which is a neutral value as it means it would take WTW, 4.48 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 4.48, WTW is not doing good in the industry: 64.08% of the companies in the same industry are doing better.
A Debt/Equity ratio of 0.71 indicates that WTW is somewhat dependend on debt financing.
WTW's Debt to Equity ratio of 0.71 is on the low side compared to the rest of the industry. WTW is outperformed by 85.92% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.71 | ||
| Debt/FCF | 4.48 | ||
| Altman-Z | 1.64 |
ROIC/WACC1.39
WACC8.35%
2.3 Liquidity
A Current Ratio of 1.14 indicates that WTW should not have too much problems paying its short term obligations.
WTW's Current ratio of 1.14 is amongst the best of the industry. WTW outperforms 81.69% of its industry peers.
A Quick Ratio of 1.14 indicates that WTW should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.14, WTW belongs to the top of the industry, outperforming 81.69% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.14 | ||
| Quick Ratio | 1.14 |
3. Growth
3.1 Past
WTW shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 20.43%, which is quite impressive.
The Earnings Per Share has been growing by 8.41% on average over the past years. This is quite good.
WTW shows a small growth in Revenue. In the last year, the Revenue has grown by 5.58%.
Measured over the past years, WTW shows a small growth in Revenue. The Revenue has been growing by 2.18% on average per year.
EPS 1Y (TTM)20.43%
EPS 3Y7.59%
EPS 5Y8.41%
EPS Q2Q%30.8%
Revenue 1Y (TTM)5.58%
Revenue growth 3Y3.25%
Revenue growth 5Y2.18%
Sales Q2Q%5.68%
3.2 Future
WTW is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 10.68% yearly.
The Revenue is expected to grow by 4.59% on average over the next years.
EPS Next Y15.63%
EPS Next 2Y11.83%
EPS Next 3Y12.3%
EPS Next 5Y10.68%
Revenue Next Year4.51%
Revenue Next 2Y2.45%
Revenue Next 3Y3.35%
Revenue Next 5Y4.59%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
WTW is valuated rather expensively with a Price/Earnings ratio of 19.78.
WTW's Price/Earnings ratio is a bit more expensive when compared to the industry. WTW is more expensive than 65.49% of the companies in the same industry.
WTW's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.96.
A Price/Forward Earnings ratio of 17.60 indicates a rather expensive valuation of WTW.
64.79% of the companies in the same industry are cheaper than WTW, based on the Price/Forward Earnings ratio.
WTW's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 24.11.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.78 | ||
| Fwd PE | 17.6 |
4.2 Price Multiples
WTW's Enterprise Value to EBITDA ratio is in line with the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of WTW indicates a slightly more expensive valuation: WTW is more expensive than 66.20% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.23 | ||
| EV/EBITDA | 14.55 |
4.3 Compensation for Growth
WTW's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
WTW has a very decent profitability rating, which may justify a higher PE ratio.
WTW's earnings are expected to grow with 12.30% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.27
PEG (5Y)2.35
EPS Next 2Y11.83%
EPS Next 3Y12.3%
5. Dividend
5.1 Amount
WTW has a Yearly Dividend Yield of 1.09%. Purely for dividend investing, there may be better candidates out there.
WTW's Dividend Yield is comparable with the industry average which is at 3.08.
With a Dividend Yield of 1.09, WTW pays less dividend than the S&P500 average, which is at 2.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.09% |
5.2 History
The dividend of WTW is nicely growing with an annual growth rate of 8.53%!
WTW has paid a dividend for at least 10 years, which is a reliable track record.
WTW has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)8.53%
Div Incr Years7
Div Non Decr Years7
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.
The dividend of WTW is growing, but earnings are growing more, so the dividend growth is sustainable.
DP-48.75%
EPS Next 2Y11.83%
EPS Next 3Y12.3%
WILLIS TOWERS WATSON PLC
NASDAQ:WTW (1/17/2025, 8:00:02 PM)
After market: 320.65 0 (0%)320.65
-1.47 (-0.46%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners93.91%
Inst Owner Change0%
Ins Owners0.25%
Ins Owner Change0.36%
Market Cap32.30B
Analysts74.4
Price Target365.93 (14.12%)
Short Float %1.4%
Short Ratio1.95
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.09% |
Yearly Dividend3.36
Dividend Growth(5Y)8.53%
DP-48.75%
Div Incr Years7
Div Non Decr Years7
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)7.52%
Min EPS beat(2)6.89%
Max EPS beat(2)8.14%
EPS beat(4)3
Avg EPS beat(4)4.77%
Min EPS beat(4)-0.4%
Max EPS beat(4)8.14%
EPS beat(8)6
Avg EPS beat(8)1.96%
EPS beat(12)10
Avg EPS beat(12)2.25%
EPS beat(16)14
Avg EPS beat(16)5%
Revenue beat(2)0
Avg Revenue beat(2)-1.11%
Min Revenue beat(2)-1.35%
Max Revenue beat(2)-0.87%
Revenue beat(4)0
Avg Revenue beat(4)-1.53%
Min Revenue beat(4)-2.74%
Max Revenue beat(4)-0.87%
Revenue beat(8)3
Avg Revenue beat(8)-0.34%
Revenue beat(12)3
Avg Revenue beat(12)-1.46%
Revenue beat(16)3
Avg Revenue beat(16)-4.3%
PT rev (1m)6.52%
PT rev (3m)15.58%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.63%
EPS NY rev (1m)0.06%
EPS NY rev (3m)0.98%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.06%
Revenue NY rev (1m)-0.19%
Revenue NY rev (3m)-0.48%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.78 | ||
| Fwd PE | 17.6 | ||
| P/S | 3.29 | ||
| P/FCF | 27.23 | ||
| P/OCF | 22.51 | ||
| P/B | 4.31 | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.55 |
EPS(TTM)16.21
EY5.06%
EPS(NY)18.22
Fwd EY5.68%
FCF(TTM)11.77
FCFY3.67%
OCF(TTM)14.25
OCFY4.44%
SpS97.38
BVpS74.38
TBVpS-27.3
PEG (NY)1.27
PEG (5Y)2.35
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -2.66% | ||
| ROE | -9.64% | ||
| ROCE | 13.88% | ||
| ROIC | 11.64% | ||
| ROICexc | 12.85% | ||
| ROICexgc | 56.43% | ||
| OM | 20.71% | ||
| PM (TTM) | N/A | ||
| GM | N/A | ||
| FCFM | 12.09% |
ROA(3y)6.29%
ROA(5y)4.88%
ROE(3y)17.67%
ROE(5y)14.48%
ROIC(3y)7.45%
ROIC(5y)6.26%
ROICexc(3y)8.53%
ROICexc(5y)7.06%
ROICexgc(3y)44.52%
ROICexgc(5y)37.24%
ROCE(3y)8.89%
ROCE(5y)7.47%
ROICexcg growth 3Y22.9%
ROICexcg growth 5Y7.63%
ROICexc growth 3Y27.74%
ROICexc growth 5Y13.94%
OM growth 3Y18.5%
OM growth 5Y10.06%
PM growth 3Y-1.27%
PM growth 5Y6.39%
GM growth 3YN/A
GM growth 5YN/A
F-Score5
Asset Turnover0.36
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.71 | ||
| Debt/FCF | 4.48 | ||
| Debt/EBITDA | 2.12 | ||
| Cap/Depr | 52.98% | ||
| Cap/Sales | 2.54% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 57.38% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.14 | ||
| Quick Ratio | 1.14 | ||
| Altman-Z | 1.64 |
F-Score5
WACC8.35%
ROIC/WACC1.39
Cap/Depr(3y)38.27%
Cap/Depr(5y)38.76%
Cap/Sales(3y)2.36%
Cap/Sales(5y)2.81%
Profit Quality(3y)69.62%
Profit Quality(5y)86.52%
High Growth Momentum
Growth
EPS 1Y (TTM)20.43%
EPS 3Y7.59%
EPS 5Y8.41%
EPS Q2Q%30.8%
EPS Next Y15.63%
EPS Next 2Y11.83%
EPS Next 3Y12.3%
EPS Next 5Y10.68%
Revenue 1Y (TTM)5.58%
Revenue growth 3Y3.25%
Revenue growth 5Y2.18%
Sales Q2Q%5.68%
Revenue Next Year4.51%
Revenue Next 2Y2.45%
Revenue Next 3Y3.35%
Revenue Next 5Y4.59%
EBIT growth 1Y20.18%
EBIT growth 3Y22.36%
EBIT growth 5Y12.46%
EBIT Next Year34.89%
EBIT Next 3Y14.7%
EBIT Next 5Y10.62%
FCF growth 1Y183.06%
FCF growth 3Y-9.5%
FCF growth 5Y2.69%
OCF growth 1Y131.08%
OCF growth 3Y-8.82%
OCF growth 5Y0.87%