WATTS WATER TECHNOLOGIES-A (WTS) Stock Fundamental Analysis
NYSE:WTS - New York Stock Exchange, Inc. - US9427491025 - Common Stock - Currency: USD
We assign a fundamental rating of 7 out of 10 to WTS. WTS was compared to 130 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 decent growth rate and is not valued too expensively.
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.
In the past 5 years WTS has always been profitable.
WTS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
WTS has a better Return On Assets (11.65%) than 84.25% of its industry peers.
The Return On Equity of WTS (16.54%) is better than 73.23% of its industry peers.
WTS's Return On Invested Capital of 15.43% is amongst the best of the industry. WTS outperforms 86.61% of its industry peers.
WTS had an Average Return On Invested Capital over the past 3 years of 15.03%. This is above the industry average of 11.03%.
The 3 year average ROIC (15.03%) for WTS is below the current ROIC(15.43%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.65% | ||
| ROE | 16.54% | ||
| ROIC | 15.43% |
ROA(3y)11.1%
ROA(5y)9.5%
ROE(3y)16.93%
ROE(5y)14.98%
ROIC(3y)15.03%
ROIC(5y)13.56%
1.3 Margins
Looking at the Profit Margin, with a value of 12.37%, WTS belongs to the top of the industry, outperforming 82.68% of the companies in the same industry.
In the last couple of years the Profit Margin of WTS has grown nicely.
The Operating Margin of WTS (17.27%) is better than 81.89% of its industry peers.
WTS's Operating Margin has improved in the last couple of years.
With an excellent Gross Margin value of 47.14%, WTS belongs to the best of the industry, outperforming 86.61% of the companies in the same industry.
WTS's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.27% | ||
| PM (TTM) | 12.37% | ||
| GM | 47.14% |
OM growth 3Y10.65%
OM growth 5Y7.18%
PM growth 3Y18.93%
PM growth 5Y9.28%
GM growth 3Y4.07%
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.
Compared to 1 year ago, WTS has about the same amount of shares outstanding.
WTS has less shares outstanding than it did 5 years ago.
The debt/assets ratio for WTS is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 8.30 indicates that WTS is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 8.30, WTS belongs to the top of the industry, outperforming 89.76% of the companies in the same industry.
The Debt to FCF ratio of WTS is 0.71, which is an excellent value as it means it would take WTS, only 0.71 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.71, WTS belongs to the top of the industry, outperforming 91.34% of the companies in the same industry.
A Debt/Equity ratio of 0.13 indicates that WTS is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.13, WTS is in the better half of the industry, outperforming 77.17% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.13 | ||
| Debt/FCF | 0.71 | ||
| Altman-Z | 8.3 |
ROIC/WACC1.6
WACC9.62%
2.3 Liquidity
A Current Ratio of 2.55 indicates that WTS has no problem at all paying its short term obligations.
WTS has a Current ratio of 2.55. This is in the better half of the industry: WTS outperforms 69.29% of its industry peers.
WTS has a Quick Ratio of 1.55. This is a normal value and indicates that WTS is financially healthy and should not expect problems in meeting its short term obligations.
With a decent Quick ratio value of 1.55, WTS is doing good in the industry, outperforming 66.93% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.55 | ||
| Quick Ratio | 1.55 |
3. Growth
3.1 Past
WTS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.27%, which is quite good.
The Earnings Per Share has been growing by 17.20% on average over the past years. This is quite good.
The Revenue has grown by 12.36% in the past year. This is quite good.
Measured over the past years, WTS shows a small growth in Revenue. The Revenue has been growing by 5.61% on average per year.
EPS 1Y (TTM)11.27%
EPS 3Y28.58%
EPS 5Y17.2%
EPS Q2Q%-0.49%
Revenue 1Y (TTM)12.36%
Revenue growth 3Y10.88%
Revenue growth 5Y5.61%
Sales Q2Q%7.79%
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 7.16% on average per year.
WTS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.11% yearly.
EPS Next Y6.72%
EPS Next 2Y4.59%
EPS Next 3Y5.66%
EPS Next 5Y7.16%
Revenue Next Year10.18%
Revenue Next 2Y5.59%
Revenue Next 3Y5.1%
Revenue Next 5Y5.11%
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.
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
Based on the Price/Earnings ratio of 23.52, the valuation of WTS can be described as rather expensive.
WTS's Price/Earnings is on the same level as the industry average.
WTS's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 28.46.
The Price/Forward Earnings ratio is 22.86, which indicates a rather expensive current valuation of WTS.
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 92.56. WTS is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.52 | ||
| Fwd PE | 22.86 |
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 the industry average as 66.93% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.17 | ||
| EV/EBITDA | 15.37 |
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)3.5
PEG (5Y)1.37
EPS Next 2Y4.59%
EPS Next 3Y5.66%
5. Dividend
5.1 Amount
WTS has a yearly dividend return of 0.81%, which is pretty low.
WTS's Dividend Yield is comparable with the industry average which is at 1.61.
Compared to an average S&P500 Dividend Yield of 2.27, 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 10.94%!
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)10.94%
Div Incr Years12
Div Non Decr Years23
5.3 Sustainability
19.04% of the earnings are spent on dividend by WTS. This is a low number and sustainable payout ratio.
WTS's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP19.04%
EPS Next 2Y4.59%
EPS Next 3Y5.66%
WATTS WATER TECHNOLOGIES-A
NYSE:WTS (1/31/2025, 8:04:00 PM)
After market: 206.78 0 (0%)206.78
-0.49 (-0.24%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners98.93%
Inst Owner Change0.1%
Ins Owners1.09%
Ins Owner Change-6.25%
Market Cap6.89B
Analysts68.57
Price Target221.75 (7.24%)
Short Float %3.12%
Short Ratio5.6
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.81% |
Yearly Dividend1.4
Dividend Growth(5Y)10.94%
DP19.04%
Div Incr Years12
Div Non Decr Years23
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)2.88%
Min EPS beat(2)1.22%
Max EPS beat(2)4.53%
EPS beat(4)4
Avg EPS beat(4)6.2%
Min EPS beat(4)1.22%
Max EPS beat(4)9.7%
EPS beat(8)8
Avg EPS beat(8)8.62%
EPS beat(12)12
Avg EPS beat(12)11.21%
EPS beat(16)16
Avg EPS beat(16)11.94%
Revenue beat(2)1
Avg Revenue beat(2)-0.21%
Min Revenue beat(2)-0.73%
Max Revenue beat(2)0.31%
Revenue beat(4)3
Avg Revenue beat(4)1.17%
Min Revenue beat(4)-0.73%
Max Revenue beat(4)3.3%
Revenue beat(8)6
Avg Revenue beat(8)0.77%
Revenue beat(12)10
Avg Revenue beat(12)1.71%
Revenue beat(16)14
Avg Revenue beat(16)2.66%
PT rev (1m)8.05%
PT rev (3m)11.63%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.18%
EPS NY rev (1m)0%
EPS NY rev (3m)0.56%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.82%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.53%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.52 | ||
| Fwd PE | 22.86 | ||
| P/S | 3.05 | ||
| P/FCF | 23.17 | ||
| P/OCF | 20.79 | ||
| P/B | 4.08 | ||
| P/tB | 9.54 | ||
| EV/EBITDA | 15.37 |
EPS(TTM)8.79
EY4.25%
EPS(NY)9.05
Fwd EY4.37%
FCF(TTM)8.93
FCFY4.32%
OCF(TTM)9.95
OCFY4.81%
SpS67.79
BVpS50.68
TBVpS21.67
PEG (NY)3.5
PEG (5Y)1.37
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.65% | ||
| ROE | 16.54% | ||
| ROCE | 19.69% | ||
| ROIC | 15.43% | ||
| ROICexc | 18.23% | ||
| ROICexgc | 43.03% | ||
| OM | 17.27% | ||
| PM (TTM) | 12.37% | ||
| GM | 47.14% | ||
| FCFM | 13.17% |
ROA(3y)11.1%
ROA(5y)9.5%
ROE(3y)16.93%
ROE(5y)14.98%
ROIC(3y)15.03%
ROIC(5y)13.56%
ROICexc(3y)18.44%
ROICexc(5y)16.48%
ROICexgc(3y)44.52%
ROICexgc(5y)42.23%
ROCE(3y)19.18%
ROCE(5y)17.31%
ROICexcg growth 3Y9.83%
ROICexcg growth 5Y2.42%
ROICexc growth 3Y12.77%
ROICexc growth 5Y5.66%
OM growth 3Y10.65%
OM growth 5Y7.18%
PM growth 3Y18.93%
PM growth 5Y9.28%
GM growth 3Y4.07%
GM growth 5Y2.18%
F-Score5
Asset Turnover0.94
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.13 | ||
| Debt/FCF | 0.71 | ||
| Debt/EBITDA | 0.48 | ||
| Cap/Depr | 63.79% | ||
| Cap/Sales | 1.5% | ||
| Interest Coverage | 27.87 | ||
| Cash Conversion | 74.75% | ||
| Profit Quality | 106.48% | ||
| Current Ratio | 2.55 | ||
| Quick Ratio | 1.55 | ||
| Altman-Z | 8.3 |
F-Score5
WACC9.62%
ROIC/WACC1.6
Cap/Depr(3y)66.19%
Cap/Depr(5y)71.09%
Cap/Sales(3y)1.45%
Cap/Sales(5y)1.81%
Profit Quality(3y)92.71%
Profit Quality(5y)113.06%
High Growth Momentum
Growth
EPS 1Y (TTM)11.27%
EPS 3Y28.58%
EPS 5Y17.2%
EPS Q2Q%-0.49%
EPS Next Y6.72%
EPS Next 2Y4.59%
EPS Next 3Y5.66%
EPS Next 5Y7.16%
Revenue 1Y (TTM)12.36%
Revenue growth 3Y10.88%
Revenue growth 5Y5.61%
Sales Q2Q%7.79%
Revenue Next Year10.18%
Revenue Next 2Y5.59%
Revenue Next 3Y5.1%
Revenue Next 5Y5.11%
EBIT growth 1Y12.61%
EBIT growth 3Y22.69%
EBIT growth 5Y13.19%
EBIT Next Year24.76%
EBIT Next 3Y10.9%
EBIT Next 5Y10.12%
FCF growth 1Y183.6%
FCF growth 3Y14.96%
FCF growth 5Y16.18%
OCF growth 1Y150.76%
OCF growth 3Y10.75%
OCF growth 5Y12.91%