WATTS WATER TECHNOLOGIES-A (WTS) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:WTS - US9427491025 - Common Stock
298.41 USD
-1.14 (-0.38%)
298.41 USD
0 (0%)
Overall WTS gets a fundamental rating of 7 out of 10. We evaluated WTS against 132 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 quite expensive at the moment. It does show a decent growth rate. These ratings could make WTS a good candidate for quality investing.
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.
- In the past 5 years WTS has always been profitable.
- Each year in the past 5 years WTS had a positive operating cash flow.
1.2 Ratios
- WTS has a better Return On Assets (11.91%) than 85.61% of its industry peers.
- WTS's Return On Equity of 16.59% is fine compared to the rest of the industry. WTS outperforms 77.27% of its industry peers.
- With an excellent Return On Invested Capital value of 14.86%, WTS belongs to the best of the industry, outperforming 87.12% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital for WTS is above the industry average of 10.24%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.91% | ||
| ROE | 16.59% | ||
| ROIC | 14.86% |
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
- The Profit Margin of WTS (13.79%) is better than 83.33% of its industry peers.
- In the last couple of years the Profit Margin of WTS has grown nicely.
- The Operating Margin of WTS (18.98%) is better than 87.12% of its industry peers.
- WTS's Operating Margin has improved in the last couple of years.
- Looking at the Gross Margin, with a value of 48.83%, WTS belongs to the top of the industry, outperforming 91.67% of the companies in the same industry.
- WTS's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 18.98% | ||
| PM (TTM) | 13.79% | ||
| GM | 48.83% |
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
- WTS has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
- The number of shares outstanding for WTS remains at a similar level compared to 1 year ago.
- Compared to 5 years ago, WTS has less shares outstanding
- Compared to 1 year ago, WTS has an improved debt to assets ratio.
2.2 Solvency
- An Altman-Z score of 10.28 indicates that WTS is not in any danger for bankruptcy at the moment.
- WTS has a better Altman-Z score (10.28) than 93.18% of its industry peers.
- The Debt to FCF ratio of WTS is 0.57, which is an excellent value as it means it would take WTS, only 0.57 years of fcf income to pay off all of its debts.
- With an excellent Debt to FCF ratio value of 0.57, WTS belongs to the best of the industry, outperforming 90.91% of the companies in the same industry.
- WTS has a Debt/Equity ratio of 0.10. This is a healthy value indicating a solid balance between debt and equity.
- With a decent Debt to Equity ratio value of 0.10, WTS is doing good in the industry, outperforming 78.79% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.1 | ||
| Debt/FCF | 0.57 | ||
| Altman-Z | 10.28 |
ROIC/WACC1.55
WACC9.6%
2.3 Liquidity
- WTS has a Current Ratio of 2.83. This indicates that WTS is financially healthy and has no problem in meeting its short term obligations.
- WTS's Current ratio of 2.83 is fine compared to the rest of the industry. WTS outperforms 74.24% of its industry peers.
- A Quick Ratio of 1.84 indicates that WTS should not have too much problems paying its short term obligations.
- The Quick ratio of WTS (1.84) is better than 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.83 | ||
| Quick Ratio | 1.84 |
3. Growth
3.1 Past
- WTS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 13.88%, which is quite good.
- WTS shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 16.86% yearly.
- The Revenue has been growing slightly by 4.18% in the past year.
- Measured over the past years, WTS shows a small growth in Revenue. The Revenue has been growing by 7.07% on average per year.
EPS 1Y (TTM)13.88%
EPS 3Y17.06%
EPS 5Y16.86%
EPS Q2Q%23.15%
Revenue 1Y (TTM)4.18%
Revenue growth 3Y7.57%
Revenue growth 5Y7.07%
Sales Q2Q%12.53%
3.2 Future
- The Earnings Per Share is expected to grow by 11.09% on average over the next years. This is quite good.
- The Revenue is expected to grow by 6.18% on average over the next years.
EPS Next Y17.34%
EPS Next 2Y13.29%
EPS Next 3Y11.1%
EPS Next 5Y11.09%
Revenue Next Year7.75%
Revenue Next 2Y7.43%
Revenue Next 3Y6.26%
Revenue Next 5Y6.18%
3.3 Evolution
- Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
- The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- WTS is valuated quite expensively with a Price/Earnings ratio of 29.81.
- WTS's Price/Earnings is on the same level as the industry average.
- The average S&P500 Price/Earnings ratio is at 27.25. WTS is around the same levels.
- WTS is valuated quite expensively with a Price/Forward Earnings ratio of 26.21.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of WTS is on the same level as its industry peers.
- When comparing the Price/Forward Earnings ratio of WTS to the average of the S&P500 Index (25.98), we can say WTS is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.81 | ||
| Fwd PE | 26.21 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of WTS is on the same level as its industry peers.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of WTS is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.97 | ||
| EV/EBITDA | 19.37 |
4.3 Compensation for Growth
- The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- WTS has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)1.72
PEG (5Y)1.77
EPS Next 2Y13.29%
EPS Next 3Y11.1%
5. Dividend
5.1 Amount
- WTS has a yearly dividend return of 0.72%, which is pretty low.
- WTS's Dividend Yield is comparable with the industry average which is at 1.01.
- With a Dividend Yield of 0.72, WTS pays less dividend than the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.72% |
5.2 History
- The dividend of WTS is nicely growing with an annual growth rate of 12.49%!
- WTS has paid a dividend for at least 10 years, which is a reliable track record.
- WTS has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)12.49%
Div Incr Years12
Div Non Decr Years23
5.3 Sustainability
- WTS pays out 19.65% of its income as dividend. This is a sustainable payout ratio.
- The dividend of WTS is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP19.65%
EPS Next 2Y13.29%
EPS Next 3Y11.1%
WATTS WATER TECHNOLOGIES-A / WTS FAQ
Can you provide the ChartMill fundamental rating for WATTS WATER TECHNOLOGIES-A?
ChartMill assigns a fundamental rating of 7 / 10 to WTS.
What is the valuation status of WATTS WATER TECHNOLOGIES-A (WTS) stock?
ChartMill assigns a valuation rating of 3 / 10 to WATTS WATER TECHNOLOGIES-A (WTS). This can be considered as Overvalued.
How profitable is WATTS WATER TECHNOLOGIES-A (WTS) stock?
WATTS WATER TECHNOLOGIES-A (WTS) has a profitability rating of 9 / 10.
What is the valuation of WATTS WATER TECHNOLOGIES-A based on its PE and PB ratios?
The Price/Earnings (PE) ratio for WATTS WATER TECHNOLOGIES-A (WTS) is 29.81 and the Price/Book (PB) ratio is 5.09.
What is the earnings growth outlook for WATTS WATER TECHNOLOGIES-A?
The Earnings per Share (EPS) of WATTS WATER TECHNOLOGIES-A (WTS) is expected to grow by 17.34% in the next year.