WILLIS TOWERS WATSON PLC (WTW) Stock Fundamental Analysis
USA - NASDAQ:WTW - IE00BDB6Q211 - Common Stock
336.62 USD
-0.37 (-0.11%)
336.62 USD
0 (0%)
WTW gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 145 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 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 4 of the past 5 years.
Each year in the past 5 years WTW had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 0.48%, WTW is doing worse than 72.41% of the companies in the same industry.
The Return On Equity of WTW (1.69%) is worse than 82.76% of its industry peers.
WTW has a better Return On Invested Capital (11.93%) than 96.55% of its industry peers.
The Average Return On Invested Capital over the past 3 years for WTW is above the industry average of 4.40%.
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
WTW has a Profit Margin of 1.40%. This is amonst the worse of the industry: WTW underperforms 81.38% of its industry peers.
Looking at the Operating Margin, with a value of 22.49%, WTW belongs to the top of the industry, outperforming 86.21% of the companies in the same industry.
WTW's Operating Margin has improved in the last couple of years.
| 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so WTW is still 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.
The debt/assets ratio for WTW is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 1.63, we must say that WTW is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.63, WTW belongs to the top of the industry, outperforming 86.90% of the companies in the same industry.
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 42.07% of the companies in the same industry.
A Debt/Equity ratio of 0.59 indicates that WTW is somewhat dependend on debt financing.
WTW's Debt to Equity ratio of 0.59 is on the low side compared to the rest of the industry. WTW is outperformed by 79.31% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.59 | ||
| Debt/FCF | 4.5 | ||
| Altman-Z | 1.63 |
ROIC/WACC1.4
WACC8.5%
2.3 Liquidity
A Current Ratio of 1.13 indicates that WTW should not have too much problems paying its short term obligations.
WTW's Current ratio of 1.13 is fine compared to the rest of the industry. WTW outperforms 80.00% of its industry peers.
WTW has a Quick 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 Quick ratio (1.13) than 80.00% 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.
The Revenue has been growing slightly by 1.26% in the past year.
The Revenue has been growing slightly by 3.48% on average over the past years.
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
WTW is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.39% yearly.
The Revenue is expected to grow by 2.99% on average over the next years.
EPS Next Y1.1%
EPS Next 2Y7.29%
EPS Next 3Y9.66%
EPS Next 5Y9.39%
Revenue Next Year-2.83%
Revenue Next 2Y1.3%
Revenue Next 3Y2.8%
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
A Price/Earnings ratio of 19.74 indicates a rather expensive valuation of WTW.
Based on the Price/Earnings ratio, WTW is valued a bit more expensive than the industry average as 70.34% of the companies are valued more cheaply.
WTW is valuated rather cheaply when we compare the Price/Earnings ratio to 27.35, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 17.30, which indicates a rather expensive current valuation of WTW.
Compared to the rest of the industry, the Price/Forward Earnings ratio of WTW indicates a slightly more expensive valuation: WTW is more expensive than 64.83% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.86, WTW is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.74 | ||
| Fwd PE | 17.3 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as WTW.
Based on the Price/Free Cash Flow ratio, WTW is valued a bit more expensive than the industry average as 64.14% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.85 | ||
| EV/EBITDA | 13.75 |
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)18.03
PEG (5Y)2.19
EPS Next 2Y7.29%
EPS Next 3Y9.66%
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 3.54.
With a Dividend Yield of 1.09, WTW pays less dividend than the S&P500 average, which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.09% |
5.2 History
On average, the dividend of WTW grows each year by 6.49%, which is quite nice.
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)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.
The dividend of WTW is growing, but earnings are growing more, so the dividend growth is sustainable.
DP260.58%
EPS Next 2Y7.29%
EPS Next 3Y9.66%
336.62
-0.37 (-0.11%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners97.59%
Inst Owner Change0%
Ins Owners0.28%
Ins Owner Change0.93%
Market Cap32.84B
Analysts75.38
Price Target370.49 (10.06%)
Short Float %2.7%
Short Ratio4.43
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.09% |
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)0.29%
PT rev (3m)-0.37%
EPS NQ rev (1m)0.56%
EPS NQ rev (3m)2.55%
EPS NY rev (1m)-0.03%
EPS NY rev (3m)1.79%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.17%
Revenue NY rev (1m)0.04%
Revenue NY rev (3m)0.4%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.74 | ||
| Fwd PE | 17.3 | ||
| P/S | 3.35 | ||
| P/FCF | 27.85 | ||
| P/OCF | 23.34 | ||
| P/B | 4.05 | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.75 |
EPS(TTM)17.05
EY5.07%
EPS(NY)19.45
Fwd EY5.78%
FCF(TTM)12.09
FCFY3.59%
OCF(TTM)14.42
OCFY4.28%
SpS100.54
BVpS83.03
TBVpS-21.22
PEG (NY)18.03
PEG (5Y)2.19
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 | 1.63 |
F-Score7
WACC8.5%
ROIC/WACC1.4
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 Y1.1%
EPS Next 2Y7.29%
EPS Next 3Y9.66%
EPS Next 5Y9.39%
Revenue 1Y (TTM)1.26%
Revenue growth 3Y3.34%
Revenue growth 5Y3.48%
Sales Q2Q%-0.18%
Revenue Next Year-2.83%
Revenue Next 2Y1.3%
Revenue Next 3Y2.8%
Revenue Next 5Y2.99%
EBIT growth 1Y12.44%
EBIT growth 3Y14.58%
EBIT growth 5Y14.92%
EBIT Next Year26.84%
EBIT Next 3Y14.35%
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%