WATTS WATER TECHNOLOGIES-A (WTS) Stock Fundamental Analysis
NYSE:WTS - New York Stock Exchange, Inc. - US9427491025 - Common Stock - Currency: USD
Overall WTS gets a fundamental rating of 7 out of 10. We evaluated WTS against 128 industry peers in the Machinery industry. WTS scores excellent points on both the profitability and health parts. This is a solid base for a good stock. WTS is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year WTS was profitable.
In the past year WTS had a positive cash flow from operations.
WTS had positive earnings in each of the past 5 years.
Each year in the past 5 years WTS had a positive operating cash flow.
1.2 Ratios
WTS has a better Return On Assets (12.15%) than 85.94% of its industry peers.
With a decent Return On Equity value of 17.06%, WTS is doing good in the industry, outperforming 75.78% of the companies in the same industry.
The Return On Invested Capital of WTS (15.11%) is better than 86.72% of its industry peers.
WTS had an Average Return On Invested Capital over the past 3 years of 14.98%. This is above the industry average of 10.75%.
The last Return On Invested Capital (15.11%) for WTS is above the 3 year average (14.98%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.15% | ||
| ROE | 17.06% | ||
| ROIC | 15.11% |
ROA(3y)12.17%
ROA(5y)10.41%
ROE(3y)17.9%
ROE(5y)15.7%
ROIC(3y)14.98%
ROIC(5y)13.71%
1.3 Margins
WTS has a Profit Margin of 12.93%. This is amongst the best in the industry. WTS outperforms 82.03% of its industry peers.
In the last couple of years the Profit Margin of WTS has grown nicely.
WTS has a better Operating Margin (17.65%) than 83.59% of its industry peers.
WTS's Operating Margin has improved in the last couple of years.
WTS has a Gross Margin of 47.15%. This is amongst the best in the industry. WTS outperforms 87.50% of its industry peers.
In the last couple of years the Gross Margin of WTS has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.65% | ||
| PM (TTM) | 12.93% | ||
| GM | 47.15% |
OM growth 3Y7.25%
OM growth 5Y7.01%
PM growth 3Y12.18%
PM growth 5Y9.49%
GM growth 3Y3.61%
GM growth 5Y2.18%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so WTS is still creating some value.
The number of shares outstanding for WTS remains at a similar level compared to 1 year ago.
WTS has less shares outstanding than it did 5 years ago.
WTS has a better debt/assets ratio than last year.
2.2 Solvency
WTS has an Altman-Z score of 8.24. This indicates that WTS is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 8.24, WTS belongs to the best of the industry, outperforming 92.97% of the companies in the same industry.
WTS has a debt to FCF ratio of 0.60. This is a very positive value and a sign of high solvency as it would only need 0.60 years to pay back of all of its debts.
The Debt to FCF ratio of WTS (0.60) is better than 89.06% of its industry peers.
WTS has a Debt/Equity ratio of 0.12. This is a healthy value indicating a solid balance between debt and equity.
WTS has a Debt to Equity ratio of 0.12. This is in the better half of the industry: WTS outperforms 77.34% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.12 | ||
| Debt/FCF | 0.6 | ||
| Altman-Z | 8.24 |
ROIC/WACC1.52
WACC9.92%
2.3 Liquidity
WTS has a Current Ratio of 2.59. This indicates that WTS is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of WTS (2.59) is better than 68.75% of its industry peers.
WTS has a Quick Ratio of 1.65. This is a normal value and indicates that WTS is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of WTS (1.65) is better than 67.97% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.59 | ||
| Quick Ratio | 1.65 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 7.26% over the past year.
Measured over the past years, WTS shows a quite strong growth in Earnings Per Share. The EPS has been growing by 16.86% on average per year.
The Revenue has grown by 9.53% in the past year. This is quite good.
The Revenue has been growing slightly by 7.07% on average over the past years.
EPS 1Y (TTM)7.26%
EPS 3Y17.06%
EPS 5Y16.86%
EPS Q2Q%4.06%
Revenue 1Y (TTM)9.53%
Revenue growth 3Y7.57%
Revenue growth 5Y7.07%
Sales Q2Q%-1.3%
3.2 Future
Based on estimates for the next years, WTS will show a small growth in Earnings Per Share. The EPS will grow by 7.00% on average per year.
The Revenue is expected to grow by 3.68% on average over the next years.
EPS Next Y3.65%
EPS Next 2Y5.26%
EPS Next 3Y5.56%
EPS Next 5Y7%
Revenue Next Year0.53%
Revenue Next 2Y1.98%
Revenue Next 3Y2.44%
Revenue Next 5Y3.68%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
WTS is valuated rather expensively with a Price/Earnings ratio of 21.79.
WTS's Price/Earnings is on the same level as the industry average.
WTS's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.63.
With a Price/Forward Earnings ratio of 21.02, WTS is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of WTS is on the same level as its industry peers.
The average S&P500 Price/Forward Earnings ratio is at 20.85. WTS is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.79 | ||
| Fwd PE | 21.02 |
4.2 Price Multiples
WTS's Enterprise Value to EBITDA is on the same level as the industry average.
WTS's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.8 | ||
| EV/EBITDA | 14.13 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates WTS does not grow enough to justify the current Price/Earnings ratio.
WTS has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)5.97
PEG (5Y)1.29
EPS Next 2Y5.26%
EPS Next 3Y5.56%
5. Dividend
5.1 Amount
WTS has a yearly dividend return of 0.87%, which is pretty low.
WTS's Dividend Yield is comparable with the industry average which is at 2.12.
Compared to an average S&P500 Dividend Yield of 2.51, WTS's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.87% |
5.2 History
The dividend of WTS is nicely growing with an annual growth rate of 12.49%!
WTS has been paying a dividend for at least 10 years, so it has a reliable track record.
WTS has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)12.49%
Div Incr Years12
Div Non Decr Years23
5.3 Sustainability
19.05% of the earnings are spent on dividend by WTS. This is a low number and sustainable payout ratio.
The dividend of WTS is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP19.05%
EPS Next 2Y5.26%
EPS Next 3Y5.56%
193.26
-3.78 (-1.92%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners101%
Inst Owner Change0.4%
Ins Owners0.99%
Ins Owner Change-1.12%
Market Cap6.45B
Analysts69.23
Price Target223.04 (15.41%)
Short Float %2.91%
Short Ratio4.64
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.87% |
Yearly Dividend1.67
Dividend Growth(5Y)12.49%
DP19.05%
Div Incr Years12
Div Non Decr Years23
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.74%
Min EPS beat(2)1.22%
Max EPS beat(2)6.27%
EPS beat(4)4
Avg EPS beat(4)5.43%
Min EPS beat(4)1.22%
Max EPS beat(4)9.7%
EPS beat(8)8
Avg EPS beat(8)8.94%
EPS beat(12)12
Avg EPS beat(12)11.27%
EPS beat(16)16
Avg EPS beat(16)11.56%
Revenue beat(2)0
Avg Revenue beat(2)-0.57%
Min Revenue beat(2)-0.73%
Max Revenue beat(2)-0.41%
Revenue beat(4)2
Avg Revenue beat(4)0.62%
Min Revenue beat(4)-0.73%
Max Revenue beat(4)3.3%
Revenue beat(8)5
Avg Revenue beat(8)0.45%
Revenue beat(12)9
Avg Revenue beat(12)1.41%
Revenue beat(16)13
Avg Revenue beat(16)2.41%
PT rev (1m)0%
PT rev (3m)0.58%
EPS NQ rev (1m)0.24%
EPS NQ rev (3m)1.5%
EPS NY rev (1m)-0.32%
EPS NY rev (3m)1.63%
Revenue NQ rev (1m)0.09%
Revenue NQ rev (3m)-1.13%
Revenue NY rev (1m)0.22%
Revenue NY rev (3m)-0.87%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.79 | ||
| Fwd PE | 21.02 | ||
| P/S | 2.86 | ||
| P/FCF | 19.8 | ||
| P/OCF | 17.86 | ||
| P/B | 3.78 | ||
| P/tB | 8.51 | ||
| EV/EBITDA | 14.13 |
EPS(TTM)8.87
EY4.59%
EPS(NY)9.19
Fwd EY4.76%
FCF(TTM)9.76
FCFY5.05%
OCF(TTM)10.82
OCFY5.6%
SpS67.47
BVpS51.17
TBVpS22.71
PEG (NY)5.97
PEG (5Y)1.29
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.15% | ||
| ROE | 17.06% | ||
| ROCE | 20.08% | ||
| ROIC | 15.11% | ||
| ROICexc | 18.78% | ||
| ROICexgc | 46.56% | ||
| OM | 17.65% | ||
| PM (TTM) | 12.93% | ||
| GM | 47.15% | ||
| FCFM | 14.47% |
ROA(3y)12.17%
ROA(5y)10.41%
ROE(3y)17.9%
ROE(5y)15.7%
ROIC(3y)14.98%
ROIC(5y)13.71%
ROICexc(3y)18.57%
ROICexc(5y)16.78%
ROICexgc(3y)44.6%
ROICexgc(5y)41.23%
ROCE(3y)19.91%
ROCE(5y)18.23%
ROICexcg growth 3Y4.4%
ROICexcg growth 5Y1.57%
ROICexc growth 3Y5.14%
ROICexc growth 5Y6.09%
OM growth 3Y7.25%
OM growth 5Y7.01%
PM growth 3Y12.18%
PM growth 5Y9.49%
GM growth 3Y3.61%
GM growth 5Y2.18%
F-Score8
Asset Turnover0.94
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.12 | ||
| Debt/FCF | 0.6 | ||
| Debt/EBITDA | 0.44 | ||
| Cap/Depr | 64.89% | ||
| Cap/Sales | 1.57% | ||
| Interest Coverage | 31.3 | ||
| Cash Conversion | 79.91% | ||
| Profit Quality | 111.84% | ||
| Current Ratio | 2.59 | ||
| Quick Ratio | 1.65 | ||
| Altman-Z | 8.24 |
F-Score8
WACC9.92%
ROIC/WACC1.52
Cap/Depr(3y)68.09%
Cap/Depr(5y)71.53%
Cap/Sales(3y)1.48%
Cap/Sales(5y)1.76%
Profit Quality(3y)99.01%
Profit Quality(5y)110.38%
High Growth Momentum
Growth
EPS 1Y (TTM)7.26%
EPS 3Y17.06%
EPS 5Y16.86%
EPS Q2Q%4.06%
EPS Next Y3.65%
EPS Next 2Y5.26%
EPS Next 3Y5.56%
EPS Next 5Y7%
Revenue 1Y (TTM)9.53%
Revenue growth 3Y7.57%
Revenue growth 5Y7.07%
Sales Q2Q%-1.3%
Revenue Next Year0.53%
Revenue Next 2Y1.98%
Revenue Next 3Y2.44%
Revenue Next 5Y3.68%
EBIT growth 1Y11.53%
EBIT growth 3Y15.37%
EBIT growth 5Y14.57%
EBIT Next Year18.03%
EBIT Next 3Y9.62%
EBIT Next 5Y9.93%
FCF growth 1Y15.9%
FCF growth 3Y28.35%
FCF growth 5Y14.6%
OCF growth 1Y16.18%
OCF growth 3Y25.93%
OCF growth 5Y13.23%