Willis Towers Watson PLC (WTW) stock analysis

P/E above its 5-year median

Willis Towers Watson's P/E of 20.3 is above its own 5-year median of 19.9.

P/E below the industry

Willis Towers Watson's P/E of 20.3 is below the Insurance Agents, Brokers, and Service median of 30.1.

P/S below the industry

Willis Towers Watson's price-to-sales of 3.00 is below the Insurance Agents, Brokers, and Service median of 3.43.

P/B below the industry

Willis Towers Watson's price-to-book of 3.97 is below the Insurance Agents, Brokers, and Service median of 4.81.

Trading below fair value

The share price of $334.18 is below our fair value estimate of $369.39.

Margin of safety under 20%

The price is 9.5% below fair value, less than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew 3.1% a year over the last three fiscal years, short of the 10% we look for.

EPS growing 10%+ a year

Diluted EPS grew 21.9% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -26.1% over the last twelve months, against a 5-year average of 10.0% a year.

Growing slower than the industry

Revenue grew 4.8% over the last twelve months; the Insurance Agents, Brokers, and Service median is 13.8%.

Guidance raised

Willis Towers Watson raised its full year 2026 foreign currency tailwind on Adjusted Diluted EPS outlook on Jul 30, 2026.

Gross margin trend

Banks and insurers do not report gross profit.

Return on equity under 15%

Return on equity was 20.2% over the last twelve months and averaged 14.7% over five years; we look for 15% on both.

Return on assets over 1%

Return on assets was 5.4%; for a bank or insurer, 1% or more is considered good.

Return on equity above the industry

Willis Towers Watson's return on equity of 20.2% is above the Insurance Agents, Brokers, and Service median of 9.3%.

Earnings grew over 5 years

Net income grew 10.0% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 15.2% over the last twelve months, against a 5-year average of 17.0%.

Net margin above the industry

Willis Towers Watson's net margin of 15.2% is above the Insurance Agents, Brokers, and Service median of 4.9%.

High debt

Debt is 84.1% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 52.1% five years ago to 84.1%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 30.4% of total debt.

Interest well covered

Operating income covers interest expense 7.5 times.

Short-term assets cover short-term debts

Current assets are 1.10 times current liabilities.

Bankruptcy risk (Altman Z)

The Altman model does not apply to insurers.

Pays a dividend

Willis Towers Watson paid dividends worth 1.1% of the share price over the last twelve months.

Yield below Treasuries

The 1.1% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Willis Towers Watson yields 1.1%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 22.8% of net income.

Covered by free cash flow

Dividends take 20.4% of free cash flow.