WATTS WATER TECHNOLOGIES-A (WTS) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:WTS - US9427491025 - Common Stock
297.61 USD
+4.04 (+1.38%)
297.61 USD
0 (0%)
WTS gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals 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. While showing a medium growth rate, WTS is valued expensive at the moment. These ratings would make WTS suitable for quality investing!
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's Return On Assets of 11.91% is amongst the best of the industry. WTS outperforms 85.61% of its industry peers.
- WTS has a better Return On Equity (16.59%) than 77.27% of its industry peers.
- The Return On Invested Capital of WTS (14.86%) is better than 87.12% of its industry peers.
- 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
- WTS has a Profit Margin of 13.79%. This is amongst the best in the industry. WTS outperforms 83.33% of its industry peers.
- In the last couple of years the Profit Margin of WTS has grown nicely.
- Looking at the Operating Margin, with a value of 18.98%, WTS belongs to the top of the industry, outperforming 87.12% of the companies in the same industry.
- In the last couple of years the Operating Margin of WTS has grown nicely.
- 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.
- In the last couple of years the Gross Margin of WTS has grown nicely.
| 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
- With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), WTS 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
- The debt/assets ratio for WTS has been reduced compared to a year ago.
2.2 Solvency
- An Altman-Z score of 10.13 indicates that WTS is not in any danger for bankruptcy at the moment.
- WTS's Altman-Z score of 10.13 is amongst the best of the industry. WTS outperforms 93.18% of its industry peers.
- WTS has a debt to FCF ratio of 0.57. This is a very positive value and a sign of high solvency as it would only need 0.57 years to pay back of all of its debts.
- WTS has a better Debt to FCF ratio (0.57) than 90.15% of its industry peers.
- WTS has a Debt/Equity ratio of 0.10. This is a healthy value indicating a solid balance between debt and equity.
- Looking at the Debt to Equity ratio, with a value of 0.10, WTS is in the better half of the industry, outperforming 78.03% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.1 | ||
| Debt/FCF | 0.57 | ||
| Altman-Z | 10.13 |
ROIC/WACC1.55
WACC9.6%
2.3 Liquidity
- A Current Ratio of 2.83 indicates that WTS has no problem at all paying its short term obligations.
- Looking at the Current ratio, with a value of 2.83, WTS is in the better half of the industry, outperforming 74.24% of the companies in the same industry.
- WTS has a Quick Ratio of 1.84. This is a normal value and indicates that WTS is financially healthy and should not expect problems in meeting its short term obligations.
- Looking at the Quick ratio, with a value of 1.84, WTS is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
| 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.
- 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.
- WTS shows a small growth in Revenue. In the last year, the Revenue has grown by 4.18%.
- The Revenue has been growing slightly by 7.07% on average over the past years.
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
- Based on estimates for the next years, WTS will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.09% on average per year.
- Based on estimates for the next years, WTS will show a small growth in Revenue. The Revenue will grow by 6.18% on average per year.
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.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
- WTS is valuated quite expensively with a Price/Earnings ratio of 29.73.
- WTS's Price/Earnings ratio is in line with the industry average.
- WTS is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 28.39, which is the current average of the S&P500 Index.
- A Price/Forward Earnings ratio of 26.14 indicates a quite expensive valuation of WTS.
- WTS's Price/Forward Earnings is on the same level as the industry average.
- When comparing the Price/Forward Earnings ratio of WTS to the average of the S&P500 Index (25.72), we can say WTS is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.73 | ||
| Fwd PE | 26.14 |
4.2 Price Multiples
- WTS's Enterprise Value to EBITDA ratio is in line with the industry average.
- WTS's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.89 | ||
| EV/EBITDA | 18.97 |
4.3 Compensation for Growth
- WTS's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- The excellent profitability rating of WTS may justify a higher PE ratio.
PEG (NY)1.71
PEG (5Y)1.76
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.
- Compared to an average industry Dividend Yield of 1.01, WTS has a dividend in line with its industry peers.
- Compared to an average S&P500 Dividend Yield of 1.82, WTS's dividend is way lower than the S&P500 average.
| 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 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
- 19.65% 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.
DP19.65%
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 29.73 and the Price/Book (PB) ratio is 5.07.
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.