DB:2WH

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

Watford Holdings

Executive Summary

Watford Holdings Ltd., together with its subsidiaries, operates as a property, casualty, and mortgage insurance and reinsurance company worldwide.


Snowflake Analysis

Reasonable growth potential with imperfect balance sheet.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 2WH's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

3.7%

2WH

-1.6%

DE Insurance

0.7%

DE Market


1 Year Return

-16.3%

2WH

-6.4%

DE Insurance

8.8%

DE Market

Return vs Industry: 2WH underperformed the German Insurance industry which returned -6.5% over the past year.

Return vs Market: 2WH underperformed the German Market which returned 8.1% over the past year.


Shareholder returns

2WHIndustryMarket
7 Day3.7%-1.6%0.7%
30 Day17.8%-2.6%0.1%
90 Day23.0%15.3%12.6%
1 Year-16.3%-16.3%-1.3%-6.4%11.2%8.8%
3 Yearn/a23.3%7.3%5.4%-3.0%
5 Yearn/a55.8%23.6%15.9%0.3%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

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

0.44x

Price to Book (PB) ratio


Share Price vs. Fair Value

Below Fair Value: 2WH (€13.9) is trading above our estimate of fair value (€0.39)

Significantly Below Fair Value: 2WH is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: 2WH is unprofitable, so we can't compare its PE Ratio to the DE Insurance industry average.

PE vs Market: 2WH is unprofitable, so we can't compare its PE Ratio to the German market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 2WH's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 2WH is good value based on its PB Ratio (0.4x) compared to the DE Insurance industry average (1x).


Next Steps

Future Growth

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

98.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 2WH is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (0.2%).

Earnings vs Market: 2WH is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: 2WH's is expected to become profitable in the next 3 years.

Revenue vs Market: 2WH's revenue (12.5% per year) is forecast to grow faster than the German market (5.9% per year).

High Growth Revenue: 2WH's revenue (12.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 2WH's Return on Equity is forecast to be low in 3 years time (8.9%).


Next Steps

Past Performance

How has Watford Holdings performed over the past 5 years?

-63.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 2WH is currently unprofitable.

Growing Profit Margin: 2WH is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: 2WH is unprofitable, and losses have increased over the past 5 years at a rate of 63.4% per year.

Accelerating Growth: Unable to compare 2WH's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: 2WH is unprofitable, making it difficult to compare its past year earnings growth to the Insurance industry (-12.4%).


Return on Equity

High ROE: 2WH has a negative Return on Equity (-10.31%), as it is currently unprofitable.


Next Steps

Financial Health

How is Watford Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: 2WH's short term assets ($1.2B) do not cover its short term liabilities ($1.4B).

Long Term Liabilities: 2WH's short term assets ($1.2B) do not cover its long term liabilities ($1.3B).


Debt to Equity History and Analysis

Debt Level: 2WH's debt to equity ratio (77.8%) is considered high.

Reducing Debt: 2WH's debt to equity ratio has increased from 22.9% to 77.8% over the past 5 years.


Balance Sheet


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable 2WH has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: 2WH is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 2.5% per year.


Next Steps

Dividend

What is Watford Holdings's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate 2WH's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate 2WH'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 2WH's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if 2WH's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of 2WH's dividend in 3 years as they are not forecast to pay a notable one for the German market.


Next Steps

Management

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

3.6yrs

Average management tenure


CEO

Jon Levy (44 yo)

0.33

Tenure

US$2,150,207

Compensation

Mr. Jonathan D. Levy, also known as Jon, serves as President at Watford Re Ltd. He serves as Watford Holdings Ltd since February 2018. He serves as Chief Executive Officer at Watford Re Ltd since April 01, ...


CEO Compensation Analysis

Compensation vs Market: Jon's total compensation ($USD2.15M) is above average for companies of similar size in the German market ($USD995.99K).

Compensation vs Earnings: Jon's compensation has increased whilst the company is unprofitable.


Leadership Team

NamePositionTenureCompensationOwnership
Jonathan Levy
President & CEO0.33yrUS$2.15m0.12%
$ 356.1k
Robert Hawley
Chief Financial Officer5.08yrsUS$1.27m0.11%
$ 306.9k
Laurence Richardson
Chief Operating Officer3.58yrsno data0.098%
$ 283.4k
John Rathgeber
Senior Advisor & Director6.58yrsUS$2.80m0.58%
$ 1.7m
Roderick Romeo
Chief Accounting Officer3.58yrsno datano data
Alexandre Jean Scherer
Head of U.S Insurance Operations4.92yrsno data0.065%
$ 188.0k
Liz Cunningham
Chief Risk Officer0.58yrno datano data

3.6yrs

Average Tenure

50yo

Average Age

Experienced Management: 2WH's management team is considered experienced (3.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
John Rathgeber
Senior Advisor & Director6.58yrsUS$2.80m0.58%
$ 1.7m
Deborah DeCotis
Independent Director3.42yrsUS$140.00k0.020%
$ 59.1k
Walter Harris
Independent Chairman of the Board6.42yrsUS$175.00k0.23%
$ 678.0k
Nicolas Alain Papadopoulo
Director6.42yrsno data0.55%
$ 1.6m
Elizabeth Gile
Independent Director2.92yrsUS$140.00k0.020%
$ 59.1k
Garth Turner
Independent Director6.42yrsUS$140.00k0.020%
$ 59.1k
Maamoun Rajeh
Director2.42yrsno data0.30%
$ 873.7k
Thomas Miller
Independent Director3.25yrsUS$140.00k0.041%
$ 117.3k

4.9yrs

Average Tenure

63.5yo

Average Age

Experienced Board: 2WH's board of directors are considered experienced (4.9 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: 2WH insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Watford Holdings Ltd.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Watford Holdings Ltd.
  • Ticker: 2WH
  • Exchange: DB
  • Founded: 2013
  • Industry: Multi-line Insurance
  • Sector: Insurance
  • Market Cap: US$340.664m
  • Listing Market Cap: US$289.598m
  • Shares outstanding: 19.89m
  • Website: https://www.watfordre.com

Number of Employees


Location

  • Watford Holdings Ltd.
  • Waterloo House
  • 1st Floor
  • Pembroke
  • HM 08
  • Bermuda

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
WTRENasdaqGS (Nasdaq Global Select)YesCommon SharesUSUSDMar 2019
2WHDB (Deutsche Boerse AG)YesCommon SharesDEEURMar 2019
WTRE.PNasdaqGS (Nasdaq Global Select)8.5% CUM PFDUSUSDJun 2019

Biography

Watford Holdings Ltd., together with its subsidiaries, operates as a property, casualty, and mortgage insurance and reinsurance company worldwide. The company offers casualty reinsurance products, such as ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/08/10 20:31
End of Day Share Price2020/08/10 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


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.