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Should Willis Towers (WLTW) Stock Remain in Your Portfolio?
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Shares of Willis Towers Watson plc have outperformed the Zacks categorized Insurance Brokerindustry, year to date. Shares gained 7.07% compared with 6.44% increase recorded by the industry.
Why Retain the Stock?
Willis Towers is likely to witness organic growth in commissions and fees, which is major component of its revenues. Also, geographic diversification supports overall growth. This apart, the company has been quite active in exchange enrollments. Management now expects organic revenue growth between 2% and 3%. Revenue synergies are expected to be unlocked in 2017 and 2018.
Strategic acquisitions have not only added capabilities to Willis Towers’ compelling portfolio but also expanded its geographical footprint in countries like Italy, Canada, the U.K. and France, over the last few years. Willis Towers is on track to unlock synergies from the merger of Willis Group and Towers Watson. It expects to generate about $30 million in cost synergies in 2017.
With a view to strengthen the clients services offered, realize operational opportunities as well as make new investment in growth initiatives, Willis Towers announced the Operational Improvement Program (OIP) in Apr 2014. The company projects additional savings of approximately $95 million in 2017.
Banking on its strong capital position, the company has increased its dividend at a five-year CAGR (2011–2016) of 15.31% and maintains the target dividend payout ratio of about 25%. This apart, Willis Towers has $1 billion worth share buyback program under its authorization. While the company has been improving its liquidity, we expect the deleveraging activities to improve its debt-to-capital ratio.
Riding on its operational strength, Willis Towers Watson projects adjusted earnings per share between $8.40 and $8.55 in 2017.
The stock is also undervalued at the current level. The stock is trading at a price to book multiple of 1.74 over the last one year, which is much lower than the industry average of 4.02. Willis Towers currently has a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks from the finance sector are American Financial Group, Inc. (AFG - Free Report) , Selective Insurance Group, Inc. (SIGI - Free Report) and The Progressive Corporation (PGR - Free Report) .
American Financial Group engages primarily in property and casualty (P&C) insurance with focus on specialized commercial products for businesses. Shares of the company gained 8.31% year to date. The stock flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here..
Selective Insurance provides insurance products and services in the U.S. Its shares rallied 9.48% year to date. The stock carries a Zacks Rank #2 (Buy).
Progressive offers personal and commercial P&C insurance, and other specialty P&C insurance and related services, primarily in the U.S. Shares of the company gained 10.34% year to date. The stock holds a Zacks Rank #2.
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Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs. bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
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Should Willis Towers (WLTW) Stock Remain in Your Portfolio?
Shares of Willis Towers Watson plc have outperformed the Zacks categorized Insurance Broker industry, year to date. Shares gained 7.07% compared with 6.44% increase recorded by the industry.
Why Retain the Stock?
Willis Towers is likely to witness organic growth in commissions and fees, which is major component of its revenues. Also, geographic diversification supports overall growth. This apart, the company has been quite active in exchange enrollments. Management now expects organic revenue growth between 2% and 3%. Revenue synergies are expected to be unlocked in 2017 and 2018.
Strategic acquisitions have not only added capabilities to Willis Towers’ compelling portfolio but also expanded its geographical footprint in countries like Italy, Canada, the U.K. and France, over the last few years. Willis Towers is on track to unlock synergies from the merger of Willis Group and Towers Watson. It expects to generate about $30 million in cost synergies in 2017.
With a view to strengthen the clients services offered, realize operational opportunities as well as make new investment in growth initiatives, Willis Towers announced the Operational Improvement Program (OIP) in Apr 2014. The company projects additional savings of approximately $95 million in 2017.
Banking on its strong capital position, the company has increased its dividend at a five-year CAGR (2011–2016) of 15.31% and maintains the target dividend payout ratio of about 25%. This apart, Willis Towers has $1 billion worth share buyback program under its authorization. While the company has been improving its liquidity, we expect the deleveraging activities to improve its debt-to-capital ratio.
Riding on its operational strength, Willis Towers Watson projects adjusted earnings per share between $8.40 and $8.55 in 2017.
The stock is also undervalued at the current level. The stock is trading at a price to book multiple of 1.74 over the last one year, which is much lower than the industry average of 4.02. Willis Towers currently has a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks from the finance sector are American Financial Group, Inc. (AFG - Free Report) , Selective Insurance Group, Inc. (SIGI - Free Report) and The Progressive Corporation (PGR - Free Report) .
American Financial Group engages primarily in property and casualty (P&C) insurance with focus on specialized commercial products for businesses. Shares of the company gained 8.31% year to date. The stock flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here..
Selective Insurance provides insurance products and services in the U.S. Its shares rallied 9.48% year to date. The stock carries a Zacks Rank #2 (Buy).
Progressive offers personal and commercial P&C insurance, and other specialty P&C insurance and related services, primarily in the U.S. Shares of the company gained 10.34% year to date. The stock holds a Zacks Rank #2.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs. bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>