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Tower Limited
Financial Services · Insurance - Property & Casualty
Updated just now
$1.58
MARKET CAP
$542.59M
P/E RATIO
6.9
DIV. YIELD
13.8%
FRANKING
—
Tower Limited provides general insurance products in New Zealand and the Pacific Islands. Its insurance products include car, house, contents, contract works and renovation cover, landlord, boat, business, travel, pet, renters, house and contents bundle, electric vehicle, motorbike and motorcycle, lifestyle block, caravan or trailer, as well as motorhome, campervan and RV insurance.
View full descriptionThe Warsi Rating combines two proven approaches: value investing principles and dividend strategy. A stock must score 70+ on both to be rated Solid or higher.
10-year ROE trends, dividend history, price ceiling calculations, and every red flag explained.
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Persistently negative free cash flow can force reliance on borrowing or equity issuance to maintain payouts.
Positive cash flow means dividends are funded by actual money, not accounting profits. As Buffett says, "Cash is fact, profit is opinion." Your income is backed by real cash generation.
Profit generated per $1 of shareholder investment
5.7% average is below the 10% threshold. This suggests the business may lack a durable competitive advantage.
Current Snapshot
10Y Avg
5.7%
Threshold
10.0%
Worst Year
-3.9%
Why It Matters
ROE shows how effectively management turns shareholder capital into profit. High and stable ROE can signal pricing power, cost discipline, or both.
Formula
Net Income / Shareholders' Equity x 100Method
Use the 10-year average ROE and review the weakest year to check whether returns stayed resilient across cycles.
Worked Example
This company's 10-year average ROE is 5.7%, meaning each $1 of shareholder equity generates $0.06 in annual profit. The threshold is 10%, and the worst single year was -3.9%.
How to Interpret
Higher and steadier ROE generally supports stronger long-term compounding. Large drawdowns in weak years can point to fragility.
Lower ROE means your investment compounds more slowly. At 5.7%, this business needs more capital to generate the same returns as competitors. Consider whether other strengths (yield, stability) compensate for weaker profitability.
Sources
Price versus estimated intrinsic value and required return thresholds.
What percentage of the stock price comes back as earnings each year
Excellent value. 14.6% earnings yield significantly exceeds the 7.0% required return.
Current Snapshot
Current Yield
14.6%
Required Yield
7.0%
Spread
+7.6pp
Why It Matters
Earnings yield reframes valuation as return on price paid. It helps compare equity earnings power against lower-risk alternatives.
Formula
(Earnings per Share / Stock Price) x 100Method
Calculate current earnings yield, then compare it to the required yield for the stock's industry setting.
Worked Example
With EPS of $0.23 and a share price of $1.58, earnings yield is 14.6%. The required yield for this industry is 7.0% (based on 4.5% government bond rate plus a risk premium).
How to Interpret
A yield above the required level suggests better valuation support; below it indicates thinner compensation for equity risk.
Strong earnings yield means you're well-compensated for owning shares instead of buying safe bonds. The business is priced to deliver solid returns.
Sources
How current price compares with estimated intrinsic value
Percentage of revenue that becomes profit after all expenses
15.4% net margin meets the 10% threshold for this sector.
Current Snapshot
Current Margin
15.4%
Threshold
10.0%
Relative Position
+5.4%
Why It Matters
Net income margin shows how much profit the business keeps from each dollar of revenue after all costs.
Formula
Net Income / Total Revenue x 100Method
Compare current margin with the industry-specific threshold to avoid cross-sector distortions.
Worked Example
This company's net income margin is 15.4% — it keeps 15 cents of every revenue dollar as profit after all expenses. The insurance — general threshold is 10%, putting it 5.4% above the requirement.
How to Interpret
Margins that are both strong and stable can indicate competitive strength; persistent weakness may limit reinvestment and payout capacity.
Adequate profitability for this sector. The business converts enough revenue into profit to support dividend payments and moderate growth.
Sources
Consistency of profits over time
Is the business growing or shrinking over time?
Revenue has grown 50% over 4 years — the business is expanding, which supports growing dividend capacity.
Current Snapshot
Revenue Change
+50.4%
Debt Change
N/A (financials)
Trend State
Improving
Why It Matters
Revenue trend shows whether the business is expanding or contracting. Debt trend adds context on whether growth is being funded conservatively.
Formula
Revenue Change (%) = (Latest Revenue - Earliest Revenue) / |Earliest Revenue| x 100; Debt Change (%) = (Latest Debt - Earliest Debt) / |Earliest Debt| x 100Method
Map annual revenue history and, where relevant, annual debt history. For financial companies, debt is excluded because deposits and reserves distort this signal.
Worked Example
Revenue changed by +50.4% across the displayed period.
How to Interpret
Rising revenue with stable or falling debt is typically stronger than rising revenue funded by rapidly rising leverage.
Revenue has grown 50% over 4 years — the business is expanding, which supports growing dividend capacity.
Sources
15.63% yield significantly exceeds Barsi's 6% minimum. Based on 6-year average, not one-time spikes.
Current Snapshot
6Y Avg Yield
15.6%
6% Requirement
6.0%
Gross Yield
N/A
Why It Matters
Yield translates dividend income into a percentage of the price paid, which is central to income-first screening.
Formula
Annual Dividends per Share / Stock Price x 100Method
Use the 6-year average annual dividend for consistency and compare the result with the 6% framework requirement.
Worked Example
With a 6-year average annual dividend of $0.25 and a share price of $1.58, the Barsi yield is 15.6%. The minimum requirement is 6%.
How to Interpret
Higher sustainable yield improves upfront income, but unusually high yields may reflect elevated risk or weak coverage.
Very high yields can signal trouble — the stock price may have dropped because the market expects a dividend cut. Verify the payout ratio is sustainable and the company can maintain this level of distributions before relying on this income.
Sources
Track record of consistent dividend payments
| Ex-Date | Pay Date | Gross | Franking | Net | Credit |
|---|---|---|---|---|---|
| ~20 Aug 2026Est | ~17 Sept 2026 | ~$0.03 | 0% | ~$0.03 | $0.00 |
| ~30 Mar 2027Est | ~15 Apr 2027 | ~$0.22 | 0% | ~$0.22 | $0.00 |
| Ex-Date | Pay Date | Gross | Franking | Net | Credit |
|---|---|---|---|---|---|
| 14 Jan 2026Interim | 11 Feb 2026 | $0.14 | 0% | $0.14 | $0.00 |
| 11 June 2025Special | 9 July 2025 | $0.07 | 0% | $0.07 | $0.00 |
| 18 Mar 2025Interim | 15 Apr 2025 | $1.09 | 0% | $1.09 | $0.00 |
| 15 Jan 2025Special | 12 Feb 2025 | $0.06 | 0% | $0.06 | $0.00 |
| 12 June 2024Final | 10 July 2024 | $0.03 | 0% | $0.03 | $0.00 |
| 17 Jan 2023Interim | 14 Feb 2023 | $0.03 | 0% | $0.03 | $0.00 |
| 15 June 2022Final | 13 July 2022 | $0.02 | 0% | $0.02 | $0.00 |
| 18 Jan 2022Interim | 15 Feb 2022 | $0.02 | 0% | $0.02 | $0.00 |
| 29 June 2021Final | 27 July 2021 | $0.02 | 0% | $0.02 | $0.00 |
| 9 June 2016Final | 7 July 2016 | $0.06 | 0% | $0.06 | $0.00 |
7 years of consistent dividends meets Barsi's 6-year minimum requirement.
Current Snapshot
History
7yr
Predictability
Variable
Payout Health
One-off event
Why It Matters
Payment consistency is a direct test of dividend reliability. Large cuts or skips often appear before confidence recovers.
Formula
Consecutive Years = count of years with dividend payments and no disqualifying skip/cut eventsMethod
Require at least 6 years of history, then check for skipped years and large cuts, allowing approved systemic-event exceptions.
Worked Example
This company has 7 years of dividend history (2016–2026). No suspensions detected — 7 consecutive years of payments. Predictability: Variable. Payout health: One-off event. The minimum requirement is 6 years.
How to Interpret
Longer uninterrupted records generally signal stronger income reliability than high yield alone.
A consistent track record through recent years gives confidence your income will continue. This company has shown commitment to shareholder returns.
Sources
Highest price to lock in 6% yield
Priced well below ceiling. 62% below means you're locking in well over 6% yield.
Current Snapshot
Current Price
$1.58
Max Buy Price
$4.12
Delta
+61.7%
Why It Matters
The price ceiling links valuation discipline to income targets by defining the price that aligns with a 6% yield target.
Formula
6-Year Average Annual Dividend / 0.06Method
Use the 6-year average dividend (not one year) and divide by 0.06 to estimate the maximum entry price for target yield.
Worked Example
With a current price of $1.58 and a ceiling of $4.12, the entry is 61.7% below the ceiling.
How to Interpret
Prices below the ceiling imply a historical yield above 6%; prices above it imply a lower historical yield at entry.
Buying this far below the ceiling locks in a yield well above 6% based on proven historical dividends. Your income starts strong from day one.
Sources
Industry category of the business
Banking is an essential service sector with stable, predictable cash flows - ideal for dividend investing.
Current Snapshot
Industry
Insurance - Property & Casualty
BESST Match
Yes
Score Impact
+3 points
Why It Matters
Sector classification helps contextualise risk and demand durability, which can materially affect dividend stability.
Formula
BESST Match = Sector in {Banks, Energy, Sanitation, Insurance, Telecom}Method
Match company sector or industry against BESST categories. A match adds scoring support but does not replace core dividend checks.
Worked Example
This company operates in Insurance - Property & Casualty (Financial Services sector). It matches the Banking category — an essential service sector with stable demand, earning a +3 point scoring advantage.
How to Interpret
BESST alignment is a positive context signal. Non-BESST stocks can still qualify with strong yield and dividend consistency.
Essential services maintain demand regardless of economic conditions - people always need electricity, banking, and telecommunications. Your income is protected by inelastic demand.
Sources
How much of a company's earnings are paid out as dividends
The company is paying out more in dividends than it earns (145%). This is unsustainable long-term and often signals a dividend cut ahead. An inflated payout also distorts the price ceiling calculation used in our analysis.
Current Snapshot
Latest Ratio
145.5%
Healthy Range
30%-75%
Zone
Unsustainable
Why It Matters
Payout ratio links dividends to earnings capacity and helps evaluate whether current distributions are likely to remain supportable.
Formula
Payout Ratio (%) = (Annual Dividend per Share / Earnings per Share) x 100Method
Calculate year-by-year payout ratios where EPS is positive, classify each year by sustainability zone, and compare with the current TTM ratio.
Worked Example
$1.22 dividend / $0.23 EPS equals 528.5% payout ratio.
How to Interpret
Ratios in the middle range are usually more sustainable than very high ratios. Values above 100% indicate dividends exceeded earnings in that period.
The company is paying out more in dividends than it earns (145%). This is unsustainable long-term and often signals a dividend cut ahead. An inflated payout also distorts the price ceiling calculation used in our analysis.
Sources
Exceptional discount: 79% BELOW the fair-value threshold (includes 30% margin of safety).
Current Snapshot
Current Margin
85.0%
Industry Threshold
30%
Status
79% Undervalued
Why It Matters
Margin of safety provides a valuation buffer against modelling uncertainty and adverse business outcomes.
Formula
(Estimated Intrinsic Value per Share - Current Price) / Estimated Intrinsic Value per Share x 100Method
Estimate intrinsic value using a two-stage DCF (10-year projection plus terminal value), then compare with current price.
Worked Example
For this stock now: intrinsic value is $10.57 per share, current price is $1.58, and margin of safety is 85.0%.
How to Interpret
Positive margin indicates price below modelled value; negative margin indicates price above modelled value. Compare against the industry's required buffer.
The market price sits far below your required entry threshold, providing a substantial valuation buffer if assumptions prove optimistic.
Sources
3 loss year(s) found with only 4 years of data. Limited data requires 100% positive EPS - industry exemptions don't apply.
Current Snapshot
Positive Years
6/4
Allowed Losses
0 (limited)
EPS CAGR
39.4%
Why It Matters
Consistency in EPS helps distinguish resilient earnings power from one-off performance spikes.
Formula
Positive EPS Years / Available EPS YearsMethod
For 8+ years of data, apply industry-specific loss tolerance. For limited data, every available year must be positive.
Worked Example
This company reported positive earnings in 6 of the last 4 years, with 3 loss years. With only 4 years of data, every year must be positive. EPS growth rate (CAGR) is 39.4%.
How to Interpret
Fewer loss years and stronger EPS continuity generally improve confidence in future dividend and valuation assumptions.
Loss years signal unpredictable earnings. During loss periods, companies often cut dividends to preserve cash. Your income could be at risk in the next downturn.
Sources