WATTS WATER TECHNOLOGIES-A (WTS) Stock Fundamental Analysis
NYSE:WTS - New York Stock Exchange, Inc. - US9427491025 - Common Stock - Currency: USD
WTS gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 127 industry peers in the Machinery industry. WTS gets an excellent profitability rating and is at the same time showing great financial health properties. WTS has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
WTS had positive earnings in the past year.
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 Return On Assets of 12.15%. This is amongst the best in the industry. WTS outperforms 84.80% of its industry peers.
The Return On Equity of WTS (17.06%) is better than 75.20% of its industry peers.
Looking at the Return On Invested Capital, with a value of 15.11%, WTS belongs to the top of the industry, outperforming 86.40% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for WTS is above the industry average of 10.84%.
The 3 year average ROIC (14.98%) for WTS is below the current ROIC(15.11%), indicating increased profibility in the last year.
| 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 better Profit Margin (12.93%) than 83.20% of its industry peers.
WTS's Profit Margin has improved in the last couple of years.
WTS has a better Operating Margin (17.65%) than 83.20% 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 47.15%, WTS belongs to the top of the industry, outperforming 86.40% of the companies in the same industry.
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.
WTS has about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for WTS has been reduced compared to 5 years ago.
Compared to 1 year ago, WTS has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 8.74 indicates that WTS is not in any danger for bankruptcy at the moment.
WTS's Altman-Z score of 8.74 is amongst the best of the industry. WTS outperforms 90.40% of its industry peers.
The Debt to FCF ratio of WTS is 0.60, which is an excellent value as it means it would take WTS, only 0.60 years of fcf income to pay off all of its debts.
WTS has a Debt to FCF ratio of 0.60. This is amongst the best in the industry. WTS outperforms 89.60% 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.
The Debt to Equity ratio of WTS (0.12) is better than 76.80% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.12 | ||
| Debt/FCF | 0.6 | ||
| Altman-Z | 8.74 |
ROIC/WACC1.35
WACC11.15%
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.
WTS's Current ratio of 2.59 is fine compared to the rest of the industry. WTS outperforms 67.20% of its industry peers.
A Quick Ratio of 1.65 indicates that WTS should not have too much problems paying its short term obligations.
WTS's Quick ratio of 1.65 is fine compared to the rest of the industry. WTS outperforms 68.80% 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.
The Earnings Per Share has been growing by 16.86% on average over the past years. This is quite good.
WTS shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 9.53%.
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)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
The Earnings Per Share is expected to grow by 7.09% on average over the next years.
WTS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.86% yearly.
EPS Next Y3.98%
EPS Next 2Y5.52%
EPS Next 3Y6.03%
EPS Next 5Y7.09%
Revenue Next Year0.31%
Revenue Next 2Y1.9%
Revenue Next 3Y2.37%
Revenue Next 5Y3.86%
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
The Price/Earnings ratio is 23.65, which indicates a rather expensive current valuation of WTS.
Compared to the rest of the industry, the Price/Earnings ratio of WTS is on the same level as its industry peers.
Compared to an average S&P500 Price/Earnings ratio of 29.75, WTS is valued a bit cheaper.
WTS is valuated rather expensively with a Price/Forward Earnings ratio of 22.74.
WTS's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 22.44. WTS is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.65 | ||
| Fwd PE | 22.74 |
4.2 Price Multiples
WTS's Enterprise Value to EBITDA ratio is in line with the industry average.
Based on the Price/Free Cash Flow ratio, WTS is valued a bit cheaper than 66.40% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.45 | ||
| EV/EBITDA | 15.4 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
WTS has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)5.95
PEG (5Y)1.4
EPS Next 2Y5.52%
EPS Next 3Y6.03%
5. Dividend
5.1 Amount
WTS has a yearly dividend return of 0.81%, which is pretty low.
Compared to an average industry Dividend Yield of 1.74, WTS has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.30, WTS's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.81% |
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 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 19.05% 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.
DP19.05%
EPS Next 2Y5.52%
EPS Next 3Y6.03%
209.77
-4.81 (-2.24%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners101%
Inst Owner Change1.52%
Ins Owners0.99%
Ins Owner Change-2.86%
Market Cap6.99B
Analysts69.23
Price Target222.19 (5.92%)
Short Float %3.06%
Short Ratio4.73
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.81% |
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)6.17%
PT rev (3m)8.27%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.96%
EPS NY rev (1m)2.57%
EPS NY rev (3m)2.1%
Revenue NQ rev (1m)-1.46%
Revenue NQ rev (3m)-1.43%
Revenue NY rev (1m)-0.91%
Revenue NY rev (3m)-1.26%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.65 | ||
| Fwd PE | 22.74 | ||
| P/S | 3.1 | ||
| P/FCF | 21.45 | ||
| P/OCF | 19.36 | ||
| P/B | 4.09 | ||
| P/tB | 9.22 | ||
| EV/EBITDA | 15.4 |
EPS(TTM)8.87
EY4.23%
EPS(NY)9.22
Fwd EY4.4%
FCF(TTM)9.78
FCFY4.66%
OCF(TTM)10.84
OCFY5.17%
SpS67.59
BVpS51.26
TBVpS22.75
PEG (NY)5.95
PEG (5Y)1.4
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 | 8.74 |
F-Score8
WACC11.15%
ROIC/WACC1.35
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 Y3.98%
EPS Next 2Y5.52%
EPS Next 3Y6.03%
EPS Next 5Y7.09%
Revenue 1Y (TTM)9.53%
Revenue growth 3Y7.57%
Revenue growth 5Y7.07%
Sales Q2Q%-1.3%
Revenue Next Year0.31%
Revenue Next 2Y1.9%
Revenue Next 3Y2.37%
Revenue Next 5Y3.86%
EBIT growth 1Y11.53%
EBIT growth 3Y15.37%
EBIT growth 5Y14.57%
EBIT Next Year16.53%
EBIT Next 3Y10.09%
EBIT Next 5Y10.22%
FCF growth 1Y15.9%
FCF growth 3Y28.35%
FCF growth 5Y14.6%
OCF growth 1Y16.18%
OCF growth 3Y25.93%
OCF growth 5Y13.23%