WILLIS TOWERS WATSON PLC (WTW) Stock Fundamental Analysis
NASDAQ:WTW - Nasdaq - IE00BDB6Q211 - Common Stock - Currency: USD
Taking everything into account, WTW scores 5 out of 10 in our fundamental rating. WTW was compared to 143 industry peers in the Insurance industry. WTW has an average financial health and profitability rating. While showing a medium growth rate, WTW is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
WTW had positive earnings in the past year.
WTW had a positive operating cash flow in the past year.
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
WTW has a Return On Assets of -0.19%. This is amonst the worse of the industry: WTW underperforms 83.92% of its industry peers.
WTW has a worse Return On Equity (-0.65%) than 83.22% of its industry peers.
WTW's Return On Invested Capital of 11.56% is amongst the best of the industry. WTW outperforms 97.20% of its industry peers.
The Average Return On Invested Capital over the past 3 years for WTW is above the industry average of 4.07%.
The 3 year average ROIC (8.90%) for WTW is below the current ROIC(11.56%), indicating increased profibility in the last year.
| 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
WTW has a better Operating Margin (21.89%) than 84.62% of its industry peers.
WTW's Operating Margin has improved in the last couple of years.
WTW does not have Profit Margin and Gross Margin available, so we won't be analyzing them here.
| 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), WTW is 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
Compared to 1 year ago, WTW has a worse debt to assets ratio.
2.2 Solvency
WTW has an Altman-Z score of 1.58. This is a bad value and indicates that WTW is not financially healthy and even has some risk of bankruptcy.
WTW has a better Altman-Z score (1.58) than 87.41% of its industry peers.
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.
The Debt to FCF ratio of WTW (4.36) is worse than 65.03% of its industry peers.
A Debt/Equity ratio of 0.59 indicates that 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: 75.52% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.59 | ||
| Debt/FCF | 4.36 | ||
| Altman-Z | 1.58 |
ROIC/WACC1.38
WACC8.37%
2.3 Liquidity
WTW has a Current 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.
With an excellent Current ratio value of 1.16, WTW belongs to the best of the industry, outperforming 83.22% of the companies in the same industry.
A Quick Ratio of 1.16 indicates that WTW should not have too much problems paying its short term obligations.
WTW has a better Quick ratio (1.16) than 83.22% 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.
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 2.42% in the last year.
WTW shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.48% yearly.
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
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.
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-0.65%
EPS Next 2Y6.49%
EPS Next 3Y9.19%
EPS Next 5Y9.39%
Revenue Next Year-3.18%
Revenue Next 2Y1.1%
Revenue Next 3Y2.53%
Revenue Next 5Y2.99%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
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 17.70, the valuation of WTW can be described as rather expensive.
Based on the Price/Earnings ratio, WTW is valued a bit more expensive than the industry average as 60.14% of the companies are valued more cheaply.
When comparing the Price/Earnings ratio of WTW to the average of the S&P500 Index (26.32), we can say WTW is valued slightly cheaper.
With a Price/Forward Earnings ratio of 15.46, WTW is valued correctly.
Based on the Price/Forward Earnings ratio, WTW is valued a bit more expensive than 65.03% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of WTW to the average of the S&P500 Index (22.13), we can say WTW is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.7 | ||
| Fwd PE | 15.46 |
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 72.03% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.14 | ||
| EV/EBITDA | 12.83 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)1.96
EPS Next 2Y6.49%
EPS Next 3Y9.19%
5. Dividend
5.1 Amount
WTW has a Yearly Dividend Yield of 1.22%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.46, WTW has a dividend in line with its industry peers.
With a Dividend Yield of 1.22, WTW pays less dividend than the S&P500 average, which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.22% |
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.
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
WTW has negative earnings and hence a negative payout ratio. The dividend may be in danger.
WTW's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP-671.7%
EPS Next 2Y6.49%
EPS Next 3Y9.19%
296.33
-4.78 (-1.59%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners95.98%
Inst Owner Change20.8%
Ins Owners0.28%
Ins Owner Change4.28%
Market Cap29.38B
Analysts76.67
Price Target371.43 (25.34%)
Short Float %1.34%
Short Ratio1.88
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.22% |
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)-0.5%
PT rev (3m)0.66%
EPS NQ rev (1m)-0.11%
EPS NQ rev (3m)-5.59%
EPS NY rev (1m)0%
EPS NY rev (3m)-3.05%
Revenue NQ rev (1m)-0.35%
Revenue NQ rev (3m)-0.35%
Revenue NY rev (1m)-0.24%
Revenue NY rev (3m)-0.63%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.7 | ||
| Fwd PE | 15.46 | ||
| P/S | 2.99 | ||
| P/FCF | 24.14 | ||
| P/OCF | 20.22 | ||
| P/B | 3.61 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.83 |
EPS(TTM)16.74
EY5.65%
EPS(NY)19.16
Fwd EY6.47%
FCF(TTM)12.27
FCFY4.14%
OCF(TTM)14.65
OCFY4.95%
SpS98.96
BVpS82.03
TBVpS-19.8
PEG (NY)N/A
PEG (5Y)1.96
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 | 1.58 |
F-Score6
WACC8.37%
ROIC/WACC1.38
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-0.65%
EPS Next 2Y6.49%
EPS Next 3Y9.19%
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%