WILLIS TOWERS WATSON PLC (WTW) Stock Fundamental Analysis
NASDAQ:WTW - IE00BDB6Q211 - Common Stock
326.84 USD
-3.23 (-0.98%)
326.84 USD
0 (0%)
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. 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
In the past year WTW was profitable.
In the past year WTW had a positive cash flow from operations.
WTW had positive earnings in 4 of the past 5 years.
WTW had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
WTW's Return On Assets of 0.48% is on the low side compared to the rest of the industry. WTW is outperformed by 67.83% of its industry peers.
Looking at the Return On Equity, with a value of 1.69%, WTW is doing worse than 78.32% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 11.93%, WTW belongs to the top of the industry, outperforming 97.20% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for WTW is above the industry average of 4.11%.
The last Return On Invested Capital (11.93%) for WTW is above the 3 year average (8.90%), which is a sign of increasing profitability.
| 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 worse Profit Margin (1.40%) than 78.32% of its industry peers.
Looking at the Operating Margin, with a value of 22.49%, WTW belongs to the top of the industry, outperforming 86.71% 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 | 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
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
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
WTW has an Altman-Z score of 1.60. 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 1.60, WTW belongs to the best of the industry, outperforming 88.81% of the companies in the same industry.
The Debt to FCF ratio of WTW is 4.50, which is a neutral value as it means it would take WTW, 4.50 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 4.50, WTW is doing worse than 60.14% of the companies in the same industry.
WTW has a Debt/Equity ratio of 0.59. This is a neutral value indicating WTW is somewhat dependend on debt financing.
WTW has a Debt to Equity ratio of 0.59. This is in the lower half of the industry: WTW underperforms 77.62% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.59 | ||
| Debt/FCF | 4.5 | ||
| Altman-Z | 1.6 |
ROIC/WACC1.41
WACC8.44%
2.3 Liquidity
WTW has a Current 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 Current ratio (1.13) than 80.42% 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's Quick ratio of 1.13 is amongst the best of the industry. WTW outperforms 80.42% 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.
WTW shows a small growth in Revenue. In the last year, the Revenue has grown by 1.26%.
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
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.
WTW is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.99% yearly.
EPS Next Y1.13%
EPS Next 2Y7.2%
EPS Next 3Y9.4%
EPS Next 5Y9.39%
Revenue Next Year-2.87%
Revenue Next 2Y1.32%
Revenue Next 3Y2.78%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
WTW is valuated rather expensively with a Price/Earnings ratio of 19.17.
WTW's Price/Earnings ratio is a bit more expensive when compared to the industry. WTW is more expensive than 67.13% of the companies in the same industry.
When comparing the Price/Earnings ratio of WTW to the average of the S&P500 Index (27.17), we can say WTW is valued slightly cheaper.
WTW is valuated correctly with a Price/Forward Earnings ratio of 16.83.
WTW's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. WTW is more expensive than 67.13% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.78, WTW is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.17 | ||
| Fwd PE | 16.83 |
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 65.73% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.04 | ||
| EV/EBITDA | 13.38 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates WTW does not grow enough to justify the current Price/Earnings ratio.
PEG (NY)17.03
PEG (5Y)2.12
EPS Next 2Y7.2%
EPS Next 3Y9.4%
5. Dividend
5.1 Amount
WTW has a Yearly Dividend Yield of 1.17%.
WTW's Dividend Yield is comparable with the industry average which is at 3.52.
With a Dividend Yield of 1.17, WTW pays less dividend than the S&P500 average, which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.17% |
5.2 History
The dividend of WTW is nicely growing with an annual growth rate of 6.49%!
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
260.58% of the earnings are spent on dividend by WTW. This is not a sustainable payout ratio.
WTW's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP260.58%
EPS Next 2Y7.2%
EPS Next 3Y9.4%
326.84
-3.23 (-0.98%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners96.41%
Inst Owner Change0%
Ins Owners0.28%
Ins Owner Change4.36%
Market Cap31.88B
Analysts76.67
Price Target369.41 (13.02%)
Short Float %2.58%
Short Ratio3.53
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.17% |
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)0.71%
PT rev (3m)-1.04%
EPS NQ rev (1m)1.1%
EPS NQ rev (3m)-1.98%
EPS NY rev (1m)1.82%
EPS NY rev (3m)1.78%
Revenue NQ rev (1m)0.17%
Revenue NQ rev (3m)-0.39%
Revenue NY rev (1m)0.36%
Revenue NY rev (3m)0.08%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.17 | ||
| Fwd PE | 16.83 | ||
| P/S | 3.25 | ||
| P/FCF | 27.04 | ||
| P/OCF | 22.66 | ||
| P/B | 3.94 | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.38 |
EPS(TTM)17.05
EY5.22%
EPS(NY)19.42
Fwd EY5.94%
FCF(TTM)12.09
FCFY3.7%
OCF(TTM)14.42
OCFY4.41%
SpS100.54
BVpS83.03
TBVpS-21.22
PEG (NY)17.03
PEG (5Y)2.12
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 | 1.6 |
F-Score7
WACC8.44%
ROIC/WACC1.41
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 Y1.13%
EPS Next 2Y7.2%
EPS Next 3Y9.4%
EPS Next 5Y9.39%
Revenue 1Y (TTM)1.26%
Revenue growth 3Y3.34%
Revenue growth 5Y3.48%
Sales Q2Q%-0.18%
Revenue Next Year-2.87%
Revenue Next 2Y1.32%
Revenue Next 3Y2.78%
Revenue Next 5Y2.99%
EBIT growth 1Y12.44%
EBIT growth 3Y14.58%
EBIT growth 5Y14.92%
EBIT Next Year27.84%
EBIT Next 3Y14.47%
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%