WATTS WATER TECHNOLOGIES-A (WTS) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:WTS - US9427491025 - Common Stock
293.57 USD
-4.06 (-1.36%)
293.57 USD
0 (0%)
We assign a fundamental rating of 7 out of 10 to WTS. WTS was compared to 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. This makes WTS very considerable 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 has a better Return On Assets (11.91%) than 85.61% of its industry peers.
- WTS has a Return On Equity of 16.59%. This is in the better half of the industry: WTS outperforms 77.27% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 14.86%, WTS belongs to the top 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
- With an excellent Profit Margin value of 13.79%, WTS belongs to the best of the industry, outperforming 83.33% of the companies in the same industry.
- 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.
- WTS has a better Gross Margin (48.83%) than 91.67% of its industry peers.
- 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
- 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.
- The debt/assets ratio for WTS has been reduced compared to a year ago.
2.2 Solvency
- WTS has an Altman-Z score of 10.23. This indicates that WTS is financially healthy and has little risk of bankruptcy at the moment.
- With an excellent Altman-Z score value of 10.23, WTS belongs to the best of the industry, outperforming 93.18% of the companies in the same industry.
- 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.
- 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.
- A Debt/Equity ratio of 0.10 indicates that WTS is not too dependend on debt financing.
- WTS has a Debt to Equity ratio of 0.10. This is in the better half of the industry: WTS outperforms 78.79% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.1 | ||
| Debt/FCF | 0.57 | ||
| Altman-Z | 10.23 |
ROIC/WACC1.55
WACC9.59%
2.3 Liquidity
- A Current Ratio of 2.83 indicates that WTS has no problem at all paying its short term obligations.
- The Current ratio of WTS (2.83) is better than 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.
- With a decent Quick ratio value of 1.84, WTS is doing good in 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.
- The Revenue has been growing slightly by 4.18% in the past year.
- WTS shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.07% yearly.
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
- The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in 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
- The Price/Earnings ratio is 29.33, which means the current valuation is very expensive for WTS.
- The rest of the industry has a similar Price/Earnings ratio as WTS.
- WTS's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 28.60.
- Based on the Price/Forward Earnings ratio of 25.79, the valuation of WTS can be described as expensive.
- The rest of the industry has a similar Price/Forward Earnings ratio as WTS.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.83, WTS is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.33 | ||
| Fwd PE | 25.79 |
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 | 28.5 | ||
| EV/EBITDA | 19.24 |
4.3 Compensation for Growth
- WTS's 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)1.69
PEG (5Y)1.74
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.
- 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
- On average, the dividend of WTS grows each year by 12.49%, which is quite nice.
- 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
- 19.65% 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 29.33 and the Price/Book (PB) ratio is 5.
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.