WILLIS TOWERS WATSON PLC (WTW) Stock Fundamental Analysis
NASDAQ:WTW - Nasdaq - IE00BDB6Q211 - Common Stock - Currency: USD
Overall WTW gets a fundamental rating of 5 out of 10. We evaluated WTW against 143 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
In the past year WTW was profitable.
WTW had a positive operating cash flow in the past year.
Of the past 5 years WTW 4 years were profitable.
WTW had a positive operating cash flow in each of the past 5 years.
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 Return On Equity of -0.65%. This is amonst the worse of the industry: WTW underperforms 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 4.27%.
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.
In the last couple of years the Operating Margin of WTW has grown nicely.
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
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
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
Based on the Altman-Z score of 1.61, we must say that WTW is in the distress zone and has some risk of bankruptcy.
WTW's Altman-Z score of 1.61 is amongst the best of the industry. WTW outperforms 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.
WTW has a worse Debt to FCF ratio (4.36) than 65.03% of its industry peers.
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 75.52% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.59 | ||
| Debt/FCF | 4.36 | ||
| Altman-Z | 1.61 |
ROIC/WACC1.38
WACC8.4%
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.
WTW has a better Current ratio (1.16) than 81.12% of its industry peers.
A Quick Ratio of 1.16 indicates that WTW should not have too much problems paying its short term obligations.
The Quick ratio of WTW (1.16) is better than 81.12% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.16 | ||
| Quick Ratio | 1.16 |
3. Growth
3.1 Past
WTW shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.45%, which is quite good.
WTW shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 9.03% yearly.
WTW shows a small growth in Revenue. In the last year, the Revenue has grown by 2.42%.
The Revenue has been growing slightly by 3.48% on average over the past years.
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.
WTW is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.99% yearly.
EPS Next Y-0.65%
EPS Next 2Y6.49%
EPS Next 3Y9.19%
EPS Next 5Y9.39%
Revenue Next Year-2.95%
Revenue Next 2Y1.26%
Revenue Next 3Y2.9%
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
The Price/Earnings ratio is 18.46, which indicates a rather expensive current valuation of WTW.
Compared to the rest of the industry, the Price/Earnings ratio of WTW indicates a slightly more expensive valuation: WTW is more expensive than 62.24% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of WTW to the average of the S&P500 Index (25.82), we can say WTW is valued slightly cheaper.
With a Price/Forward Earnings ratio of 16.13, 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.
The average S&P500 Price/Forward Earnings ratio is at 21.76. WTW is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.46 | ||
| Fwd PE | 16.13 |
4.2 Price Multiples
WTW's Enterprise Value to EBITDA is on the same level as the industry average.
Based on the Price/Free Cash Flow ratio, WTW is valued a bit more expensive than the industry average as 71.33% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.18 | ||
| EV/EBITDA | 13.28 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)2.04
EPS Next 2Y6.49%
EPS Next 3Y9.19%
5. Dividend
5.1 Amount
WTW has a Yearly Dividend Yield of 1.18%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.18, WTW has a dividend in line with its industry peers.
With a Dividend Yield of 1.18, WTW pays less dividend than the S&P500 average, which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.18% |
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.
As WTW did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)6.49%
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.
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%
309.02
+0.95 (+0.31%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners96.22%
Inst Owner Change20.8%
Ins Owners0.25%
Ins Owner Change4.01%
Market Cap30.64B
Analysts76.67
Price Target373.29 (20.8%)
Short Float %1.25%
Short Ratio1.72
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.18% |
Yearly Dividend3.5
Dividend Growth(5Y)6.49%
DP-671.7%
Div Incr Years7
Div Non Decr Years7
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)0.38%
PT rev (3m)2.49%
EPS NQ rev (1m)-2.87%
EPS NQ rev (3m)-5.8%
EPS NY rev (1m)-0.38%
EPS NY rev (3m)-3.05%
Revenue NQ rev (1m)0.18%
Revenue NQ rev (3m)0.22%
Revenue NY rev (1m)-0.25%
Revenue NY rev (3m)-0.82%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.46 | ||
| Fwd PE | 16.13 | ||
| P/S | 3.12 | ||
| P/FCF | 25.18 | ||
| P/OCF | 21.09 | ||
| P/B | 3.77 | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.28 |
EPS(TTM)16.74
EY5.42%
EPS(NY)19.16
Fwd EY6.2%
FCF(TTM)12.27
FCFY3.97%
OCF(TTM)14.65
OCFY4.74%
SpS98.96
BVpS82.03
TBVpS-19.8
PEG (NY)N/A
PEG (5Y)2.04
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 | 1.61 |
F-Score6
WACC8.4%
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-2.95%
Revenue Next 2Y1.26%
Revenue Next 3Y2.9%
Revenue Next 5Y2.99%
EBIT growth 1Y13.35%
EBIT growth 3Y14.58%
EBIT growth 5Y14.92%
EBIT Next Year28.03%
EBIT Next 3Y15.23%
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%