WILLIS TOWERS WATSON PLC (WTW)
IE00BDB6Q211 - Common Stock
We assign a fundamental rating of 5 out of 10 to WTW. WTW was compared to 141 industry peers in the Insurance industry. WTW has an excellent profitability rating, but there are some minor concerns on its financial health. WTW has a decent growth rate and is not valued too expensively.
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.
Each year in the past 5 years WTW has been profitable.
WTW had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
WTW has a better Return On Assets (3.45%) than 71.43% of its industry peers.
The Return On Equity of WTW (10.98%) is comparable to the rest of the industry.
The Return On Invested Capital of WTW (9.29%) is better than 93.57% 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 (7.45%) for WTW is below the current ROIC(9.29%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.45% | ||
| ROE | 10.98% | ||
| ROIC | 9.29% |
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
WTW's Profit Margin of 10.88% is fine compared to the rest of the industry. WTW outperforms 72.14% of its industry peers.
In the last couple of years the Profit Margin of WTW has grown nicely.
With a decent Operating Margin value of 19.78%, WTW is doing good in the industry, outperforming 77.14% of the companies in the same industry.
In the last couple of years the Operating Margin of WTW has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.78% | ||
| PM (TTM) | 10.88% | ||
| 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
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
WTW has less shares outstanding than it did 5 years ago.
WTW has a worse debt/assets ratio than last year.
2.2 Solvency
WTW has an Altman-Z score of 1.40. This is a bad value and indicates that WTW is not financially healthy and even has some risk of bankruptcy.
With an excellent Altman-Z score value of 1.40, WTW belongs to the best of the industry, outperforming 88.57% of the companies in the same industry.
The Debt to FCF ratio of WTW is 5.99, which is a neutral value as it means it would take WTW, 5.99 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 5.99, WTW is not doing good in the industry: 65.71% of the companies in the same industry are doing better.
A Debt/Equity ratio of 0.56 indicates that WTW is somewhat dependend on debt financing.
WTW has a Debt to Equity ratio of 0.56. This is in the lower half of the industry: WTW underperforms 65.71% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.56 | ||
| Debt/FCF | 5.99 | ||
| Altman-Z | 1.4 |
ROIC/WACC1.18
WACC7.88%
2.3 Liquidity
A Current Ratio of 1.12 indicates that WTW should not have too much problems paying its short term obligations.
The Current ratio of WTW (1.12) is better than 80.00% of its industry peers.
A Quick Ratio of 1.12 indicates that WTW should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.12, WTW is in the better half of the industry, outperforming 80.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.12 | ||
| Quick Ratio | 1.12 |
3. Growth
3.1 Past
WTW shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 9.72%, which is quite good.
The Earnings Per Share has been growing by 8.41% 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 7.04% in the last year.
The Revenue has been growing slightly by 2.18% on average over the past years.
EPS 1Y (TTM)9.72%
EPS 3Y7.59%
EPS 5Y8.41%
EPS growth Q2Q15.85%
Revenue 1Y (TTM)7.04%
Revenue growth 3Y3.25%
Revenue growth 5Y2.18%
Revenue growth Q2Q4.32%
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 8.73% on average per year.
Based on estimates for the next years, WTW will show a small growth in Revenue. The Revenue will grow by 3.90% on average per year.
EPS Next Y13.16%
EPS Next 2Y13.19%
EPS Next 3Y13.63%
EPS Next 5Y8.73%
Revenue Next Year5.88%
Revenue Next 2Y5.54%
Revenue Next 3Y5.44%
Revenue Next 5Y3.9%
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 accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 16.78, the valuation of WTW can be described as correct.
The rest of the industry has a similar Price/Earnings ratio as WTW.
WTW is valuated rather cheaply when we compare the Price/Earnings ratio to 28.28, which is the current average of the S&P500 Index.
WTW is valuated correctly with a Price/Forward Earnings ratio of 13.50.
WTW's Price/Forward Earnings ratio is in line with the industry average.
When comparing the Price/Forward Earnings ratio of WTW to the average of the S&P500 Index (20.88), we can say WTW is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.78 | ||
| Fwd PE | 13.5 |
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 65.00% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.92 | ||
| EV/EBITDA | 12.51 |
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 13.63% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.28
PEG (5Y)1.99
EPS Next 2Y13.19%
EPS Next 3Y13.63%
5. Dividend
5.1 Amount
WTW has a Yearly Dividend Yield of 1.39%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 4.26, WTW has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.41, WTW's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.39% |
5.2 History
The dividend of WTW is nicely growing with an annual growth rate of 8.53%!
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)8.53%
Div Incr Years5
Div Non Decr Years5
5.3 Sustainability
WTW pays out 33.69% of its income as dividend. This is a sustainable payout ratio.
WTW's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP33.69%
EPS Next 2Y13.19%
EPS Next 3Y13.63%
WILLIS TOWERS WATSON PLC
NASDAQ:WTW (5/3/2024, 7:26:56 PM)
After market: 251.99 0 (0%)251.99
-0.5 (-0.2%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap25.76B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.39% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
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Revenue beat(2)
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PT rev (1m)
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EPS NQ rev (3m)
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EPS NY rev (3m)
Revenue NQ rev (1m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.78 | ||
| Fwd PE | 13.5 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.28
PEG (5Y)1.99
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.45% | ||
| ROE | 10.98% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 19.78% | ||
| PM (TTM) | 10.88% | ||
| GM | N/A | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.32
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.56 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.12 | ||
| Quick Ratio | 1.12 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)9.72%
EPS 3Y7.59%
EPS 5Y
EPS growth Q2Q
EPS Next Y13.16%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)7.04%
Revenue growth 3Y3.25%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y