Willis Towers Watson (NasdaqGS:WTW) - Share price, News & Analysis

WTW fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	1/6
Past Performance	4/6
Financial Health	5/6
Dividends	4/6

WTW Stock Overview

Willis Towers Watson Public Limited Company operates as an advisory, broking, and solutions company worldwide.

Rewards

Trading at 30.2% below our estimate of its fair value

Earnings are forecast to grow 6.07% per year

Earnings grew by 75.2% over the past year

Risk Analysis

Unstable dividend track record

Large one-off items impacting financial results

Willis Towers Watson Competitors

Marsh & McLennan Companies

NYSE:MMC

US$80.3b

Aon

NYSE:AON

US$59.6b

Arthur J. Gallagher

NYSE:AJG

US$34.0b

Brown & Brown

NYSE:BRO

US$16.3b

Price History & Performance

Summary of all time highs, changes and price drops for Willis Towers Watson
Historical stock prices
Current Share Price	US$204.25
52 Week High	US$268.19
52 Week Low	US$197.30
Beta	0.80
1 Month Change	-12.77%
3 Month Change	-8.06%
1 Year Change	-23.21%
3 Year Change	15.81%
5 Year Change	45.19%
Change since IPO	364.49%

Recent News & Updates

May 04

Here's Why I Think Willis Towers Watson (NASDAQ:WTW) Is An Interesting Stock

It's only natural that many investors, especially those who are new to the game, prefer to buy shares in 'sexy' stocks...

Shareholder Returns

	WTW	US Insurance	US Market
7D	-1.7%	-0.07%	0.7%
1Y	-23.2%	0.6%	-10.8%

Return vs Industry: WTW underperformed the US Insurance industry which returned 0.3% over the past year.

Return vs Market: WTW underperformed the US Market which returned -10.4% over the past year.

Price Volatility

Is WTW's price volatile compared to industry and market?
WTW volatility
WTW Average Weekly Movement	4.0%
Insurance Industry Average Movement	5.1%
Market Average Movement	7.8%
10% most volatile stocks in US Market	16.8%
10% least volatile stocks in US Market	2.9%

Stable Share Price: WTW is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: WTW's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1828	44,000	Carl Hess	https://www.willistowerswatson.com

Willis Towers Watson Public Limited Company operates as an advisory, broking, and solutions company worldwide. It operates through two segments, Health, Wealth and Career; and and Risk and Broking. The company offers actuarial support, plan design, and administrative services for traditional pension and retirement savings plans; plan management consulting, broking, and administration services for health and group benefit programs; and benefits outsourcing services.

Willis Towers Watson Fundamentals Summary

How do Willis Towers Watson's earnings and revenue compare to its market cap?
WTW fundamental statistics
Market Cap	US$22.95b
Earnings (TTM)	US$1.71b
Revenue (TTM)	US$8.93b

13.3x

P/E Ratio

2.5x

P/S Ratio

Is WTW overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
WTW income statement (TTM)
Revenue	US$8.93b
Cost of Revenue	US$4.85b
Gross Profit	US$4.08b
Other Expenses	US$2.37b
Earnings	US$1.71b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	15.34
Gross Margin	45.64%
Net Profit Margin	19.15%
Debt/Equity Ratio	41.3%

How did WTW perform over the long term?

See historical performance and comparison

Dividends

1.6%

Current Dividend Yield

18%

Payout Ratio

Valuation

Is Willis Towers Watson undervalued compared to its fair value and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

30.2%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: WTW ($204.25) is trading below our estimate of fair value ($292.76)

Significantly Below Fair Value: WTW is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: WTW is poor value based on its PE Ratio (13.3x) compared to the US Insurance industry average (11.2x).

PE vs Market: WTW is good value based on its PE Ratio (13.3x) compared to the US market (15.5x).

Price to Earnings Growth Ratio

PEG Ratio: WTW is poor value based on its PEG Ratio (2.2x)

Price to Book Ratio

PB vs Industry: WTW is overvalued based on its PB Ratio (2.1x) compared to the US Insurance industry average (1x).

Future Growth

How is Willis Towers Watson forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

6.1%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: WTW's forecast earnings growth (6.1% per year) is above the savings rate (1.9%).

Earnings vs Market: WTW's earnings (6.1% per year) are forecast to grow slower than the US market (12.6% per year).

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

Revenue vs Market: WTW's revenue (5.3% per year) is forecast to grow slower than the US market (8% per year).

High Growth Revenue: WTW's revenue (5.3% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: WTW's Return on Equity is forecast to be low in 3 years time (16.3%).

Past Performance

How has Willis Towers Watson performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

30.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: WTW has a large one-off gain of $744.0M impacting its March 31 2022 financial results.

Growing Profit Margin: WTW's current net profit margins (19.1%) are higher than last year (11.7%).

Past Earnings Growth Analysis

Earnings Trend: WTW's earnings have grown significantly by 30% per year over the past 5 years.

Accelerating Growth: WTW's earnings growth over the past year (75.2%) exceeds its 5-year average (30% per year).

Earnings vs Industry: WTW earnings growth over the past year (75.2%) exceeded the Insurance industry -2.6%.

Return on Equity

High ROE: WTW's Return on Equity (15.6%) is considered low.

Financial Health

How is Willis Towers Watson's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: WTW's short term assets ($16.4B) exceed its short term liabilities ($14.9B).

Long Term Liabilities: WTW's short term assets ($16.4B) exceed its long term liabilities ($6.9B).

Debt to Equity History and Analysis

Debt Level: WTW's net debt to equity ratio (21.5%) is considered satisfactory.

Reducing Debt: WTW's debt to equity ratio has increased from 38.8% to 41.3% over the past 5 years.

Debt Coverage: WTW's debt is well covered by operating cash flow (48.3%).

Interest Coverage: WTW's interest payments on its debt are well covered by EBIT (8.4x coverage).

Balance Sheet

Dividend

What is Willis Towers Watson current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

1.60%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: WTW's dividend (1.61%) is higher than the bottom 25% of dividend payers in the US market (1.54%).

High Dividend: WTW's dividend (1.61%) is low compared to the top 25% of dividend payers in the US market (4.05%).

Stability and Growth of Payments

Stable Dividend: WTW's dividend payments have been volatile in the past 10 years.

Growing Dividend: WTW's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (17.7%), WTW's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its low cash payout ratio (18.2%), WTW's dividend payments are well covered by cash flows.

Next Steps

Explore strong dividend paying companies in the Insurance industry.

Management

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

0.8yrs

Average management tenure

CEO

Carl Hess (59 yo)

0.33

Tenure

US$4,828,485

Compensation

Mr. Carl A. Hess has been Chief Executive Officer and Director of Willis Towers Watson Public Limited Company since January 1, 2022. He serves as Director at Willis North America Inc since January 10, 2022...

CEO Compensation Analysis

Compensation vs Market: Carl's total compensation ($USD4.83M) is below average for companies of similar size in the US market ($USD13.26M).

Compensation vs Earnings: Carl's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: WTW's management team is not considered experienced ( 0.8 years average tenure), which suggests a new team.

Board Members

Experienced Board: WTW'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 not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/05/16 00:00
End of Day Share Price	2022/05/16 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31