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On Apr 11, 2013, shares of Willis Group Holdings plc (WSH - Analyst Report) reached a 52-week high of $39.69.

Willis Group is gradually expanding its business through acquisitions and product launches. On Apr 2, 2013, the company announced the acquisition of professional indemnity insurance broker PPH Limited and its subsidiary Prime Professions Limited. This should expand the company’s proficiency as well as market share in the professional indemnity insurance business.

Willis Group also acquired Broking Italia SRL, Attain Consulting and its sister concern, Trustee Principles, and Avalon Actuarial Inc. in 2012. These acquisitions will help the company write more business going forward, thereby aiding top-line growth. Further, on Mar 12, 2013, Willis Programs – a subsidiary of Willis Group – announced the launch of DairyProtectorSM, a customized insurance program for dairy farms.

Moreover, Willis Group has consistently tried to enhance shareholder value via dividend increase as well as share buyback. In Feb 2013, the board approved a 3.7% hike in its dividend. The company’s dividend yield of 2.85% is ahead of the industry yield of 1.64% as well as of other insurance brokers, Aon plc (AON - Analyst Report), with a dividend yield of 1.01%, Brown & Brown Inc. (BRO - Snapshot Report), with a dividend yield of 1.13%, and Marsh & McLennan Companies Inc. (MMC - Analyst Report), with a yield of 2.45%.

With respect to earnings trend, Willis Group delivered positive earnings surprise in 3 out of 4 quarters in 2012. Our proven model shows that this insurance broker is likely to beat earnings in the first quarter of 2013 because it has a right combination of a positive Earnings ESP (Read: Zacks Earnings ESP: A Better Method) and Zacks Rank.  ESP or Expected Surprise Prediction, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +1.53%. Willis currently carries a Zacks Rank #3 (Hold).

Willis Group is expected to announce its first-quarter earnings after the closing bell on Apr 30. The Zacks Consensus Estimate for the company’s first-quarter earnings is currently pegged at $1.31 per share.

The valuation of Willis Group shares is attractive. The shares are trading at a little premium to the peer group average on a price-to-book basis and discount to the peer group average on a forward price-to-earnings basis. The return on equity of 18.5% is substantially higher than the peer group average of 12.3%.

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