WILLIS TOWERS WATSON PLC (WTW) Stock Fundamental Analysis
USA - NASDAQ:WTW - IE00BDB6Q211 - Common Stock
336.71 USD
+5.01 (+1.51%)
336.71 USD
0 (0%)
WTW gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 146 industry peers in the Insurance industry. WTW has an average financial health and profitability rating. 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.
WTW had a positive operating cash flow in the past year.
Of the past 5 years WTW 4 years were profitable.
In the past 5 years WTW always reported a positive cash flow from operatings.
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 69.86% of its industry peers.
The Return On Equity of WTW (1.69%) is worse than 80.14% of its industry peers.
Looking at the Return On Invested Capital, with a value of 11.93%, WTW belongs to the top of the industry, outperforming 96.58% of the companies in the same industry.
WTW had an Average Return On Invested Capital over the past 3 years of 8.90%. This is above the industry average of 4.47%.
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
With a Profit Margin value of 1.40%, WTW is not doing good in the industry: 79.45% of the companies in the same industry are doing better.
WTW has a Operating Margin of 22.49%. This is amongst the best in the industry. WTW outperforms 86.30% of its industry peers.
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
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 1.63, we must say that WTW is in the distress zone and has some risk of bankruptcy.
WTW has a better Altman-Z score (1.63) than 86.30% of its industry peers.
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.
With a Debt to FCF ratio value of 4.50, WTW perfoms like the industry average, outperforming 41.10% 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's Debt to Equity ratio of 0.59 is on the low side compared to the rest of the industry. WTW is outperformed by 78.08% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.59 | ||
| Debt/FCF | 4.5 | ||
| Altman-Z | 1.63 |
ROIC/WACC1.41
WACC8.46%
2.3 Liquidity
A Current Ratio of 1.13 indicates that WTW should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.13, WTW belongs to the top of the industry, outperforming 80.14% of the companies in the same industry.
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 80.14% 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.
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 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
The Earnings Per Share is expected to grow by 9.39% on average over the next years. This is quite good.
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.
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 19.75, the valuation of WTW can be described as rather expensive.
WTW's Price/Earnings ratio is a bit more expensive when compared to the industry. WTW is more expensive than 66.44% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.38, WTW is valued a bit cheaper.
Based on the Price/Forward Earnings ratio of 17.34, the valuation of WTW can be described as rather expensive.
Based on the Price/Forward Earnings ratio, WTW is valued a bit more expensive than 65.07% of the companies in the same industry.
WTW is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.86, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.75 | ||
| Fwd PE | 17.34 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as WTW.
65.07% of the companies in the same industry are cheaper than WTW, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.86 | ||
| EV/EBITDA | 13.74 |
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)17.54
PEG (5Y)2.19
EPS Next 2Y7.2%
EPS Next 3Y9.4%
5. Dividend
5.1 Amount
WTW has a Yearly Dividend Yield of 1.13%. Purely for dividend investing, there may be better candidates out there.
WTW's Dividend Yield is comparable with the industry average which is at 3.44.
With a Dividend Yield of 1.13, WTW pays less dividend than the S&P500 average, which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.13% |
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.
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 Years8
Div Non Decr Years8
5.3 Sustainability
WTW pays out 260.58% of its income as dividend. 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 2Y7.2%
EPS Next 3Y9.4%
336.71
+5.01 (+1.51%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners96.41%
Inst Owner Change0%
Ins Owners0.28%
Ins Owner Change-4.18%
Market Cap32.85B
Analysts75.38
Price Target369.41 (9.71%)
Short Float %2.83%
Short Ratio4.45
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.13% |
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)0.4%
PT rev (3m)-0.66%
EPS NQ rev (1m)0.73%
EPS NQ rev (3m)2.09%
EPS NY rev (1m)0%
EPS NY rev (3m)1.84%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.17%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.32%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.75 | ||
| Fwd PE | 17.34 | ||
| P/S | 3.35 | ||
| P/FCF | 27.86 | ||
| P/OCF | 23.34 | ||
| P/B | 4.06 | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.74 |
EPS(TTM)17.05
EY5.06%
EPS(NY)19.42
Fwd EY5.77%
FCF(TTM)12.09
FCFY3.59%
OCF(TTM)14.42
OCFY4.28%
SpS100.54
BVpS83.03
TBVpS-21.22
PEG (NY)17.54
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
WACC8.46%
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%