Willis Towers Watson PLC's Dividend Analysis
Assessing the Upcoming Dividend and Financial Health of Willis Towers Watson PLC
Willis Towers Watson PLC (NASDAQ:WTW) recently announced a dividend of $0.88 per share, payable on 2024-04-15, with the ex-dividend date set for 2024-03-27. 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 look into Willis Towers Watson PLC's 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, and career (its consulting operations) and risk and brokering (its brokerage operations). It 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 1.23% and a 12-month forward dividend yield of 1.29%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Willis Towers Watson PLC's annual dividend growth rate was 6.90%. Extended to a five-year horizon, this rate increased to 7.30% per year. And over the past decade, Willis Towers Watson PLC's annual dividends per share growth rate stands at 1.30%.
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 1.75%.
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 2023-12-31, Willis Towers Watson PLC's dividend payout ratio is 0.23.
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 8 out of 10 as of 2023-12-31, 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 8 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 10.50% per year on average, a rate that outperforms approximately 67.88% 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 7.40% per year on average, a rate that outperforms approximately 49.37% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 9.30%, which outperforms approximately 62.67% of global competitors.
Next Steps
Considering Willis Towers Watson PLC's consistent dividend payments, a respectable growth rate in dividends, a sustainable payout ratio, robust profitability, and solid growth metrics, the company presents itself as a potentially attractive option for value investors focused on dividend income. The financial health indicated by these factors suggests a promising outlook for current and prospective investors. However, it is always crucial to factor in the overall market conditions and individual investment strategies before making any decisions. Will Willis Towers Watson PLC continue to be a reliable source of dividends in the years to come? Only time will tell, but the current indicators certainly paint a positive picture.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
