Today we're going to take a closer look at large-cap Finance company Willis Towers Watson Public, whose shares are currently trading at $234.51. We've been asking ourselves whether the company is under or over valued at today's prices... let's perform a brief value analysis to find out!
Willis Towers Watson Public's Valuation Is in Line With Its Sector Averages:
Willis Towers Watson Public Limited Company operates as an advisory, broking, and solutions company worldwide. The company belongs to the Finance sector, which has an average price to earnings (P/E) ratio of 14.34 and an average price to book (P/B) ratio of 1.57. In contrast, Willis Towers Watson Public has a trailing 12 month P/E ratio of 22.8 and a P/B ratio of 2.47.
When we divide Willis Towers Watson Public's P/E ratio by its expected five-year EPS growth rate, we obtain a PEG ratio of 0.98, which indicates that the market is undervaluing the company's projected growth (a PEG ratio of 1 indicates a fairly valued company). Your analysis of the stock shouldn't end here. Rather, a good PEG ratio should alert you that it may be worthwhile to take a closer look at the stock.
EPS Trend Sustained Primarily by Reducing the Number of Shares Outstanding:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $9,039 | $9,352 | $8,998 | $8,866 |
| Interest Income (MM) | -$234 | -$244 | -$211 | -$208 |
| Operating Margins | 14.7% | 12.9% | 24.8% | 14.4% |
| Net Margins | 11.55% | 10.65% | 46.92% | 11.38% |
| Net Income (MM) | $1,044 | $996 | $4,222 | $1,009 |
| Depreciation & Amort. (MM) | -$729 | -$770 | -$650 | -$567 |
| Earnings Per Share | $8.02 | $7.65 | $32.78 | $10.29 |
| EPS Growth | n/a | -4.61% | 328.5% | -68.61% |
| Diluted Shares (MM) | 130 | 130 | 129 | 106 |
| Free Cash Flow (MM) | $776 | $1,488 | $1,860 | $608 |
| Capital Expenditures (MM) | -$305 | -$286 | -$201 | -$204 |
| Net Current Assets (MM) | -$8,020 | -$7,298 | -$3,174 | -$5,841 |
| Current Ratio | 1.06 | 1.05 | 1.26 | 1.07 |
| Long Term Debt (MM) | $5,301 | $4,664 | $3,974 | $4,471 |
| Net Debt / EBITDA | 2.17 | 1.59 | 0.01 | 1.81 |
