Yahoo Finance Why Should You Stay Invested in Willis Towers (WTW) Stock
Willis Towers Watson plc WTW is well-poised for growth on increasing organic commissions and fees, customer retention levels, new business, strategic buyouts, solid capital position and favorable growth estimates. These factors make Willis Towers stock worth retaining in one’s portfolio.
Willis Towers has a solid track record of beating earnings estimates in the last 14 quarters.
It carries a VGM Score of B.
Zacks Rank & Price Performance
Willis Towers currently carries a Zacks Rank #3 (Hold). In a year, the stock has gained 5.1% against the industry’s decline of 1.9%.
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Optimistic Growth Projections
The Zacks Consensus Estimate for Willis Towers’ 2022 earnings is pegged at $13.54, indicating an increase of 16.7% from the year-ago reported figure. The consensus mark for 2023 earnings stands at $15.30, suggesting growth of 13% year over year.
The expected long-term earnings growth is pegged at 16%, better than the industry average of 11.3%.
Business Tailwinds
Willis Towers’ top line should continue to benefit from solid customer retention levels and growing new business as well as geographic diversification. For 2022, WTW expects to deliver mid-single-digit organic revenue growth.
WTW’s 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.
Willis Towers remains on track to generate more than $360 million of annualized savings through 2024, contributing 360 basis points of margin improvement. It estimates $110 million of run-rate savings in 2022.
Improving liquidity along with a solid balance sheet bodes well for growth.
Effective Capital Deployment
Willis Towers has a decent dividend history of raising dividends at a nine-year CAGR (2014-2022) of 11.8%. WTW also expects to complete an additional repurchase of $3 billion in 2022.
Willis Towers estimates to deploy $10-$11 billion in capital through 2024 to drive shareholder value with new investment and aims for industry-leading total shareholder return.
Upbeat 2024 Financial Targets
Willis Towers re-cast its 2024 financial target following the divestiture of its Russian subsidiaries. It now aims to deliver more than $9.9 billion in revenues, adjusted operating margin between 23% and 24% and adjusted earnings per share between $17.50 and $20.50. It remains on track to deliver mid-single-digit organic revenue growth and 400-500 basis points of adjusted operating margin expansion. Free cash flow is estimated between $4.3 and $5.3 billion.
Stocks to Consider
Some better-ranked stocks from the property and casualty insurance industry are MGIC Investment Corporation MTG, Radian Group Inc. RDN and EverQuote EVER, 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.
The bottom line of MGIC Investment surpassed estimates in each of the last four quarters, the average being 36.34%. Year to date, the insurer has lost 7.1%.
The Zacks Consensus Estimate for MTG’s 2022 earnings indicates a year-over-year increase of 49.7%. The expected long-term earnings growth rate is pegged at 5%.
Radian delivered a trailing four-quarter average earnings surprise of 45.10%. Year to date, RDN has lost 9%.
The Zacks Consensus Estimate for Radian’s 2022 earnings indicates a year-over-year increase of 49.5%. The expected long-term earnings growth rate is pegged at 5%.
EverQuote’s earnings surpassed estimates in each of the last four quarters, the average being 40.50%. Year to date, EVER has lost 29.4%.
The Zacks Consensus Estimate for EVER’s 2022 and 2023 earnings has moved 45.5% and 17.6% north in the past 30 days.
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MGIC Investment Corporation (MTG) : Free Stock Analysis Report
Radian Group Inc. (RDN) : Free Stock Analysis Report
EverQuote, Inc. (EVER) : Free Stock Analysis Report
Willis Towers Watson Public Limited Company (WTW) : Free Stock Analysis Report
