Yahoo Finance Here's Why Investors Should Retain Willis Towers (WTW) Now
Willis Towers Watson Public Limited Company WTW is well-positioned for growth, driven by increasing healthcare premiums, improved consulting work and software sales, strategic buyouts and effective capital deployment.
Growth Projections
The Zacks Consensus Estimate for Willis Towers’s 2024 earnings per share indicates a year-over-year increase of 12.3%. The consensus estimate for revenues is pegged at $9.95 billion, implying a year-over-year improvement of 4.9%.
The consensus estimate for 2025 earnings per share and revenues indicates an increase of 12.2% and 5.2%, respectively, from the corresponding 2024 estimates.
Earnings Surprise History
Willis Towers has a decent earnings surprise history. It beat estimates in three of the last four quarters and missed in one, with the average being 0.63%.
Zacks Rank & Price Performance
WTW currently carries a Zacks Rank #3 (Hold). The stock has gained 14% compared with the industry’s growth of 12.5% in the past year.
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Business Tailwinds
The Health, Wealth & Career segment is expected to gain from higher demand for products and advisory work, new client appointments and growing healthcare premiums. Increased consulting work, strong client demand for talent and compensation products and employee engagement offerings are also likely to add to the upside.
The Corporate Risk and Broking segment is expected to gain from double-digit growth across the global lines of business, notably in Aerospace, Natural Resources and FINEX, improved client retention as well as strong contributions from both construction and M&A solutions. Increased software sales and advisory work should continue to drive the Insurance Consulting and Technology business.
Willis Towers’ growth strategy focuses on core opportunities with the highest growth and returns. The broker innovated and developed its offerings in markets and boosted its abilities in faster-growth markets. Strategic buyouts add to the upside apart from expanding its geographical footprint, increasing capabilities and strengthening its portfolio.
The company has been improving its liquidity while maintaining a solid balance sheet. WTW has sufficient cash reserves to meet its short-term debt obligations. For 2024, the company expects an incremental improvement in free cash flow margin. This expansion in free cash flow margin, on top of expected organic revenue growth, should drive strong long-term growth in free cash flow.
A solid balance sheet and steady cash flow are expected to help the company engage in capital deployment for buybacks, dividend payouts, debt repayments, acquisitions and investments that drive and support growth.
The company remains committed to enhancing its shareholders’ value. With a 2.4% hike in dividend in February 2024, its dividend witnessed a five-year CAGR (2019-2024) of 6.2%.
WTW remains focused on deploying excess capital and cash flow into share repurchases. WTW expects approximately $750 million of share repurchases in 2024. With a solid financial position, it intends to continue to reward its shareholders, technology and new business opportunities and pursue opportunistic mergers and acquisitions.
Stocks to Consider
Some better-ranked stocks from the insurance industry are Brown & Brown, Inc. BRO, RLI Corp. RLI and NMI Holdings Inc NMIH, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Brown & Brown has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 11.9%. In the past year, shares of BRO have climbed 38.4%.
The Zacks Consensus Estimate for BRO’s 2024 and 2025 earnings implies year-over-year growth of 28.7% and 8%, respectively.
RLI Corp. has a solid track record of beating earnings estimates in three of the trailing four quarters and missing in one, the average being 132.39%. In the past year, shares of RLI have gained 13.8%.
The Zacks Consensus Estimate for RLI’s 2024 and 2025 earnings implies year-over-year growth of 18.2% and 2.6%, respectively.
NMI Holdings has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 8.60%. In the past year, shares of NMIH have jumped 27.8%.
The Zacks Consensus Estimate for NMIH’s 2024 and 2025 earnings implies year-over-year growth of 10.4% and 7.5%, respectively.
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RLI Corp. (RLI) : Free Stock Analysis Report
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Willis Towers Watson Public Limited Company (WTW) : Free Stock Analysis Report
NMI Holdings Inc (NMIH) : Free Stock Analysis Report
