On Apr 11, 2013, shares of
Willis Group Holdings plc
) 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,
), with a dividend yield of 1.01%,
Brown & Brown Inc.
), with a dividend yield of 1.13%, and
Marsh & McLennan Companies Inc.
), 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%.
AON PLC (AON): Free Stock Analysis Report
BROWN & BROWN (BRO): Free Stock Analysis
MARSH &MCLENNAN (MMC): Free Stock Analysis
WILLIS GP HLDGS (WSH): Free Stock Analysis
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