Willis Towers Watson PLC (WTW): A Deep Dive into Dividend Performance and Sustainability
Exploring the Dividend History, Yield, and Growth Rates of Willis Towers Watson PLC (NASDAQ:WTW)
Willis Towers Watson PLC (NASDAQ:WTW) recently announced a dividend of $0.84 per share, payable on 2023-10-16, with the ex-dividend date set for 2023-09-28. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's deep dive into Willis Towers Watson PLCs dividend performance and assess its sustainability.
What Does Willis Towers Watson PLC Do?
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In January 2016, Towers Watson and Willis Group merged to form Willis Towers Watson, a global advisory, insurance brokerage, and solutions company. The company operates in two business segments: health, wealth & career (its consulting operations) and risk & brokering (its brokerage operations). The company has about 47,000 employees.
A Glimpse at Willis Towers Watson PLC's Dividend History
Willis Towers Watson PLC has maintained a consistent dividend payment record since 2003. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Willis Towers Watson PLC's Dividend Yield and Growth
As of today, Willis Towers Watson PLC currently has a 12-month trailing dividend yield of 1.56% and a 12-month forward dividend yield of 1.59%. This suggests an expectation of increase dividend payments over the next 12 months.
Over the past three years, Willis Towers Watson PLC's annual dividend growth rate was 8.10%. Extended to a five-year horizon, this rate increased to 8.70% per year. And over the past decade, Willis Towers Watson PLC's annual dividends per share growth rate stands at 0.10%.
Based on Willis Towers Watson PLC's dividend yield and five-year growth rate, the 5-year yield on cost of Willis Towers Watson PLC stock as of today is approximately 2.37%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, Willis Towers Watson PLC's dividend payout ratio is 0.34.
Willis Towers Watson PLC's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Willis Towers Watson PLC's profitability 7 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Willis Towers Watson PLC's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Willis Towers Watson PLC's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Willis Towers Watson PLC's revenue has increased by approximately 7.10% per year on average, a rate that outperforms than approximately 60.22% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Willis Towers Watson PLC's earnings increased by approximately 14.00% per year on average, a rate that outperforms than approximately 69.65% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 23.40%, which outperforms than approximately 86.11% of global competitors.
Next Steps
Given Willis Towers Watson PLC's consistent dividend payments, impressive dividend growth rate, sustainable payout ratio, and strong profitability and growth metrics, the company presents a compelling case for dividend-focused investors. However, it's crucial to remember that while past performance is a useful indicator, it does not guarantee future results. Therefore, investors should continue to monitor Willis Towers Watson PLC's financial health and industry trends.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article first appeared on GuruFocus.
