July 10, 2025 a 12:46 pm
WTW: Dividend Analysis - Willis Towers Watson Public Limited Company
Willis Towers Watson's dividend profile demonstrates its commitment to returning value to shareholders. Despite challenges in financial metrics such as the payout ratio, the company maintains a steady dividend history with growth potential. Investors should be aware of the financial inefficiencies reflected in the earnings but acknowledge the resilience in its dividend decisions.
Overview 📊
Willis Towers Watson operates within a specialized sector showing a current dividend yield modestly positioned at 1.17%. The company offers a dividend per share of 3.47 USD, supported by a continuous 23-year dividend history. Notably, no recent dividend cuts or suspensions have been observed, which highlights the company's commitment to dividend reliability.
| Metric | Details |
|---|---|
| Sector | Insurance & Professional Services |
| Dividend yield | 1.17% |
| Current dividend per share | 3.47 USD |
| Dividend history | 23 years |
| Last cut or suspension | None |
Dividend History 📈
The dividend history of Willis Towers Watson reveals consistency and gradual increases over the years. This consistency is a sign of stability and predictability, which are crucial for long-term investors seeking income reliability. The lack of recent dividend cuts also instills confidence in shareholders.
| Year | Dividend Per Share |
|---|---|
| 2025 | 1.84 |
| 2024 | 3.52 |
| 2023 | 3.36 |
| 2022 | 3.28 |
| 2021 | 3.02 |
Dividend Growth 💹
The growth in dividends over the 3- and 5-year periods indicates Willis Towers Watson’s approach towards rewarding shareholders progressively. This growth is essential for combatting inflation and ensuring that real dividend income does not erode over time. It reflects the company's capability to generate increasing free cash flows.
| Time | Growth |
|---|---|
| 3 years | 5.24% |
| 5 years | 6.25% |
The average dividend growth is 6.25% over 5 years. This shows moderate but steady dividend growth.
Payout Ratio 💵
The payout ratio is a critical factor in assessing dividend sustainability. For Willis Towers Watson, the EPS-based payout ratio stands at a staggering -654.83%, indicating financial inefficiencies potentially due to negative earnings. However, the Free Cash Flow (FCF)-based payout ratio at 24.70% highlights sufficient cash flow coverage for dividend payments.
| Key Figure | Ratio |
|---|---|
| EPS-based | -654.83% |
| Free Cash Flow-based | 24.70% |
Cashflow & Capital Efficiency 💰
Analyzing the cash flow and capital efficiency of Willis Towers Watson is vital as it impacts its capacity to sustain dividend payments and invest in growth opportunities.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 3.97% | 4.36% | 2.22% |
| Earnings Yield | -0.31% | 4.17% | 3.68% |
| CAPEX to Operating Cash Flow | 16.20% | 17.99% | 25.12% |
| Stock Compensation to Revenue | 1.22% | 1.32% | 1.12% |
| FCF / Operating Cash Flow Ratio | 83.80% | 82.01% | 74.88% |
Willis Towers Watson's cash flow efficiency, while currently subdued in terms of earnings yield, facilitates stable dividends.
Balance Sheet & Leverage Analysis 📉
A solid balance sheet ensures the resilience of a company. Key leverage metrics highlight financial stability and affect the capacity to maintain dividends.
| Ratio | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 0.75 | 0.62 | 0.55 |
| Debt-to-Assets | 0.21 | 0.20 | 0.17 |
| Debt-to-Capital | 0.43 | 0.38 | 0.35 |
| Net Debt to EBITDA | 6.44 | 2.24 | 2.24 |
| Current Ratio | 0 | 1.06 | 1.07 |
| Quick Ratio | 1.20 | 1.06 | 1.07 |
| Financial Leverage | 3.49 | 3.06 | 3.17 |
The balance sheet indicates moderate leverage levels, suggesting strong foundational support for future operational flexibility.
Fundamental Strength & Profitability 🏛️
Profitability ratios are key indicators of business efficiency and strength. They offer insights into financial health and long-term viability for dividend payouts.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | -1.23% | 11.08% | 10.07% |
| Return on Assets | -0.35% | 3.63% | 3.18% |
| Return on Invested Capital | -3.52% | 6.59% | 5.74% |
| Net Margin | -0.99% | 11.13% | 11.38% |
| EBIT Margin | 3.70% | 15.97% | 16.54% |
| EBITDA Margin | 6.31% | 21.29% | 21.18% |
These financial fundamentals underscore Willis Towers Watson's resilience and capability to maintain profitability, despite reported inefficiencies.
Price Development 📷
Dividend Scoring System ✅
| Criteria | Description | Score |
|---|---|---|
| Dividend yield | Competitive vs. peers | 2 |
| Dividend Stability | Consistent payments over 23 years | 4 |
| Dividend growth | Moderate growth in past 5 years | 3 |
| Payout ratio | Concerning EPS, solid FCF | 2 |
| Financial stability | Signs of financial stress | 3 |
| Dividend continuity | Uninterrupted history | 5 |
| Cashflow Coverage | Sufficient in last 5 years | 3 |
| Balance Sheet Quality | Modest leverage, sustainable | 3 |
Total Score: 25/40
Rating 🗣️
In conclusion, Willis Towers Watson presents a mixed dividend value proposition. While historical dividend stability and growth provide investor assurance, financial challenges, specifically in earnings and leverage, suggest cautious optimism. Stakeholders should weigh the dependable dividend payouts against the backdrop of current operational inefficiencies before making investment decisions.