On Dec 29, we issued an updated research report on Willis Group Holdings Public Limited Company (WSH).

In its third quarter, Willis Group missed the Zacks Consensus Estimate and also fell short of the year-ago earnings due to higher expenses. However, the top line improved on higher organic growth in commissions and fees.

Willis Group has been consistently expanding its global presence in countries like Italy, Canada, U.K. and France. The company recently acquired a wide range of Irish pension and financial advisory businesses from IFG Group plc thus solidifying its pensions business and strengthening its operational performance and commitment to improve wealth-planning services. These buyouts will help Willis Group enhance its global Human Capital and Benefits practice thereby aiding top-line growth.

Willis Group has also been striving to enhance its shareholder value via dividend increase as well as share buyback. The company raised its dividend at a five-year compound annual growth rate (CAGR) of 2.9%. Its current dividend yield of 2.69% is better than the sector average of 1.99%. Additionally, the company bought back 4.8 million shares worth $203 million thereby exhausting its previous share repurchase program of $200 million.

Moreover, the company has been lowering its debt levels thereby improving its leverage position. The company also priced senior notes, the proceeds of which will be deployed to redeem senior debts with higher interest rates. This in turn will lower the cost of debt for the company.

In order to improve the clients services offered, realize operational opportunities as well as to make new investment in growth initiatives Willis Group announced the Operational Improvement Program in Apr 2014. This program is expected to yield cost savings and expand margins.

However, Wills Group has been experiencing a decline in investment income since 2011 due to lower-than-average interest rates. Operating expenses have been on a rise over the last few years resulting in margin contraction. Moreover, the implementation of the Operational Improvement Program led to higher restructuring costs which in turn increased the overall expenses of the company.

Nonetheless, the company has been undertaking a number of acquisitions to drive inorganic growth. Lower-than-expected earnings accretion from the acquisitions is expected to weigh on overall results. In addition, competition from industry majors as well as on premium rates has resulted in lower demand in some classes of business.

Currently, Wills Group carries a Zacks Rank #3 (Hold).

Other Stocks to Consider

Stocks that are better-ranked than Willis Group include Alleghany Corp. (Y), Aon plc (AON) and Marsh & McLennan Companies, Inc. (MMC). While Alleghany sports a Zacks Rank #1 (Strong Buy), Aon and Marsh & McLennan Companies hold a Zacks Rank #2 (Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
WILLIS GP HLDGS (WSH): Free Stock Analysis Report
 
MARSH &MCLENNAN (MMC): Free Stock Analysis Report
 
AON PLC (AON): Free Stock Analysis Report
 
ALLEGHANY CORP (Y): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research