ASX:TWR

Stock Analysis Report

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Executive Summary

Tower Limited provides general insurance products and services in New Zealand and the Pacific Islands.


Snowflake Analysis

Excellent balance sheet and good value.

Share Price & News

How has Tower's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: TWR has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.9%

TWR

-0.4%

AU Insurance

1.9%

AU Market


1 Year Return

-20.0%

TWR

-27.6%

AU Insurance

-8.4%

AU Market

Return vs Industry: TWR exceeded the Australian Insurance industry which returned -27.6% over the past year.

Return vs Market: TWR underperformed the Australian Market which returned -8.4% over the past year.


Shareholder returns

TWRIndustryMarket
7 Day-0.9%-0.4%1.9%
30 Day-2.7%-2.1%2.4%
90 Day-10.0%3.5%11.7%
1 Year-16.9%-20.0%-23.7%-27.6%-4.6%-8.4%
3 Year-17.0%-36.1%-8.1%-20.6%19.4%3.7%
5 Year-59.7%-71.9%5.5%-17.0%39.5%9.4%

Price Volatility Vs. Market

How volatile is Tower's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Tower undervalued compared to its fair value and its price relative to the market?

11.62x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: Insufficient data to calculate TWR's fair value to establish if it is undervalued.

Significantly Below Fair Value: Insufficient data to calculate TWR's fair value to establish if it is undervalued.


Price To Earnings Ratio

PE vs Industry: TWR is good value based on its PE Ratio (11.6x) compared to the AU Insurance industry average (19.5x).

PE vs Market: TWR is good value based on its PE Ratio (11.6x) compared to the Australian market (16x).


Price to Earnings Growth Ratio

PEG Ratio: TWR is good value based on its PEG Ratio (0.7x)


Price to Book Ratio

PB vs Industry: TWR is good value based on its PB Ratio (0.7x) compared to the AU Insurance industry average (2.5x).


Next Steps

Future Growth

How is Tower forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

17.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TWR's forecast earnings growth (17.5% per year) is above the savings rate (2.3%).

Earnings vs Market: TWR's earnings (17.5% per year) are forecast to grow faster than the Australian market (14.7% per year).

High Growth Earnings: TWR's earnings are forecast to grow, but not significantly.

Revenue vs Market: TWR's revenue (3.2% per year) is forecast to grow slower than the Australian market (4.1% per year).

High Growth Revenue: TWR's revenue (3.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TWR's Return on Equity is forecast to be low in 3 years time (7.4%).


Next Steps

Past Performance

How has Tower performed over the past 5 years?

43.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TWR has high quality earnings.

Growing Profit Margin: TWR's current net profit margins (6.1%) are higher than last year (5.6%).


Past Earnings Growth Analysis

Earnings Trend: TWR's earnings have grown significantly by 43.9% per year over the past 5 years.

Accelerating Growth: TWR's earnings growth over the past year (18.5%) is below its 5-year average (43.9% per year).

Earnings vs Industry: TWR earnings growth over the past year (18.5%) exceeded the Insurance industry 3.3%.


Return on Equity

High ROE: TWR's Return on Equity (5.6%) is considered low.


Next Steps

Financial Health

How is Tower's financial position?


Financial Position Analysis

Short Term Liabilities: TWR's short term assets (NZ$379.5M) exceed its short term liabilities (NZ$320.4M).

Long Term Liabilities: TWR's short term assets (NZ$379.5M) exceed its long term liabilities (NZ$89.5M).


Debt to Equity History and Analysis

Debt Level: TWR's debt to equity ratio (4.2%) is considered satisfactory.

Reducing Debt: TWR's debt to equity ratio has increased from 0.03% to 4.2% over the past 5 years.

Debt Coverage: TWR's debt is well covered by operating cash flow (101.3%).

Interest Coverage: TWR's interest payments on its debt are well covered by EBIT (44.8x coverage).


Balance Sheet


Next Steps

Dividend

What is Tower current dividend yield, its reliability and sustainability?

2.26%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate TWR's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate TWR's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if TWR's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if TWR's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: TWR is not paying a notable dividend for the Australian market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of TWR's dividend in 3 years as they are not forecast to pay a notable one for the Australian market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.6yrs

Average management tenure


CEO

Richard Harding

5yrs

Tenure

NZ$990,000

Compensation

Mr. Richard Harding has been Chief Executive Officer at Tower Limited since August 17, 2015. Mr. Harding has almost 30 years of experience in the insurance sector in Australia and Asia. He served as Chief ...


CEO Compensation Analysis

Compensation vs Market: Richard's total compensation ($USD655.28K) is about average for companies of similar size in the Australian market ($USD510.92K).

Compensation vs Earnings: Richard's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Richard Harding
Chief Executive Officer5yrsNZ$990.00k0.011%
NZ$ 24.3k
Jeffrey Wright
Chief Financial Officerno datano data0.0059%
NZ$ 13.6k
Jane Hardy
General Manager of Claims & Operations1.17yrsno datano data
Peter Muggleston
Chief Information Officer1.67yrsno datano data
Nicholas Meseldzija
Head of Corporate Affairs & Reputationno datano datano data
Michelle McBride
General Manager of People & Culture1.75yrsno datano data
Gavin Pearce
Chief Risk Officer1.58yrsno datano data
Michelle James
Chief Customer Officerno datano datano data
Ron Mudaliar
Chief Underwriting Officer1yrno datano data
John Feyter
no datano datano data
Rick Shaw
Appointed Actuaryno datano datano data

1.6yrs

Average Tenure

Experienced Management: TWR's management team is not considered experienced ( 1.6 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Michael Stiassny
Independent Chairman7.42yrsNZ$139.00k0.12%
NZ$ 269.0k
Stephen Smith
Independent Non-Executive Director8.25yrsNZ$87.57k0.0055%
NZ$ 12.6k
Warren Lee
Independent Non Executive Director5.25yrsNZ$87.57k0.011%
NZ$ 24.8k
Graham Stuart
Independent Non-Executive Director8.25yrsNZ$93.57k0.030%
NZ$ 68.0k
Wendy Thorpe
Independent Non-Executive Director2.42yrsNZ$87.57k0.0015%
NZ$ 3.4k
Aniseto Ting
Director of National Pacific Insurance Limitedno dataNZ$1.80kno data
Rodney Reid
Director of National Pacific Insurance Limitedno dataNZ$4.31kno data
Alden Godinet
Director of National Pacific Insurance Limitedno dataNZ$4.31kno data
Marcus Nagel
Non-Executive Director1.58yrsNZ$69.33k0.000010%
NZ$ 22.9

6.3yrs

Average Tenure

Experienced Board: TWR's board of directors are considered experienced (6.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 25%.


Top Shareholders

Company Information

Tower Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Tower Limited
  • Ticker: TWR
  • Exchange: ASX
  • Founded: 1869
  • Industry: Property and Casualty Insurance
  • Sector: Insurance
  • Market Cap: NZ$248.772m
  • Listing Market Cap: NZ$229.473m
  • Shares outstanding: 421.65m
  • Website: https://www.tower.co.nz

Location

  • Tower Limited
  • Tower Centre
  • Level 14
  • Auckland
  • 1142
  • New Zealand

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TWRNZSE (New Zealand Stock Exchange)YesOrdinary SharesNZNZDSep 1999
TWRASX (Australian Securities Exchange)YesOrdinary SharesAUAUDSep 1999
TWRCHIA (Chi-X Australia)YesOrdinary SharesAUAUDSep 1999

Biography

Tower Limited provides general insurance products and services in New Zealand and the Pacific Islands. Its insurance products include car, house, renters', landlord, contents, business, travel, boat, motor ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/08/09 10:39
End of Day Share Price2020/08/05 00:00
Earnings2020/03/31
Annual Earnings2019/09/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.