XYLEM INC (XYL) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:XYL - US98419M1009 - Common Stock
135.52 USD
-4.89 (-3.48%)
135.58 USD
+0.06 (+0.04%)
We assign a fundamental rating of 5 out of 10 to XYL. XYL was compared to 132 industry peers in the Machinery industry. XYL has an average financial health and profitability rating. XYL is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
- XYL had positive earnings in the past year.
- XYL had a positive operating cash flow in the past year.
- Each year in the past 5 years XYL has been profitable.
- In the past 5 years XYL always reported a positive cash flow from operatings.
1.2 Ratios
- XYL has a better Return On Assets (5.48%) than 62.12% of its industry peers.
- XYL has a Return On Equity (8.46%) which is in line with its industry peers.
- With a Return On Invested Capital value of 7.29%, XYL perfoms like the industry average, outperforming 54.55% of the companies in the same industry.
- XYL had an Average Return On Invested Capital over the past 3 years of 6.95%. This is below the industry average of 10.24%.
- The last Return On Invested Capital (7.29%) for XYL is above the 3 year average (6.95%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.48% | ||
| ROE | 8.46% | ||
| ROIC | 7.29% |
ROA(3y)4.55%
ROA(5y)4.34%
ROE(3y)8.17%
ROE(5y)9.27%
ROIC(3y)6.95%
ROIC(5y)7%
1.3 Margins
- XYL's Profit Margin of 10.66% is fine compared to the rest of the industry. XYL outperforms 75.00% of its industry peers.
- XYL's Profit Margin has improved in the last couple of years.
- XYL's Operating Margin of 13.85% is fine compared to the rest of the industry. XYL outperforms 66.67% of its industry peers.
- In the last couple of years the Operating Margin of XYL has remained more or less at the same level.
- The Gross Margin of XYL (38.23%) is better than 72.73% of its industry peers.
- XYL's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 13.85% | ||
| PM (TTM) | 10.66% | ||
| GM | 38.23% |
OM growth 3Y3.16%
OM growth 5Y-1.19%
PM growth 3Y8.14%
PM growth 5Y6.35%
GM growth 3Y-0.44%
GM growth 5Y-0.76%
2. Health
2.1 Basic Checks
- XYL has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- The number of shares outstanding for XYL has been increased compared to 1 year ago.
- XYL has more shares outstanding than it did 5 years ago.
- The debt/assets ratio for XYL has been reduced compared to a year ago.
2.2 Solvency
- XYL has an Altman-Z score of 4.55. This indicates that XYL is financially healthy and has little risk of bankruptcy at the moment.
- XYL has a Altman-Z score of 4.55. This is in the better half of the industry: XYL outperforms 68.94% of its industry peers.
- XYL has a debt to FCF ratio of 2.24. This is a good value and a sign of high solvency as XYL would need 2.24 years to pay back of all of its debts.
- XYL's Debt to FCF ratio of 2.24 is fine compared to the rest of the industry. XYL outperforms 75.00% of its industry peers.
- A Debt/Equity ratio of 0.17 indicates that XYL is not too dependend on debt financing.
- XYL's Debt to Equity ratio of 0.17 is fine compared to the rest of the industry. XYL outperforms 72.73% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.17 | ||
| Debt/FCF | 2.24 | ||
| Altman-Z | 4.55 |
ROIC/WACC0.77
WACC9.49%
2.3 Liquidity
- XYL has a Current Ratio of 1.96. This is a normal value and indicates that XYL is financially healthy and should not expect problems in meeting its short term obligations.
- XYL has a Current ratio of 1.96. This is comparable to the rest of the industry: XYL outperforms 43.94% of its industry peers.
- A Quick Ratio of 1.50 indicates that XYL should not have too much problems paying its short term obligations.
- XYL has a better Quick ratio (1.50) than 64.39% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.96 | ||
| Quick Ratio | 1.5 |
3. Growth
3.1 Past
- XYL shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 18.34%, which is quite good.
- XYL shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 7.22% yearly.
- Looking at the last year, XYL shows a small growth in Revenue. The Revenue has grown by 5.58% in the last year.
- XYL shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 10.28% yearly.
EPS 1Y (TTM)18.34%
EPS 3Y19.95%
EPS 5Y7.22%
EPS Q2Q%23.42%
Revenue 1Y (TTM)5.58%
Revenue growth 3Y18.12%
Revenue growth 5Y10.28%
Sales Q2Q%7.79%
3.2 Future
- Based on estimates for the next years, XYL will show a quite strong growth in Earnings Per Share. The EPS will grow by 12.11% on average per year.
- XYL is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.70% yearly.
EPS Next Y19.47%
EPS Next 2Y14.6%
EPS Next 3Y13.26%
EPS Next 5Y12.11%
Revenue Next Year6.37%
Revenue Next 2Y4.86%
Revenue Next 3Y4.86%
Revenue Next 5Y5.7%
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 accelerating.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 28.00, XYL can be considered very expensive at the moment.
- XYL's Price/Earnings ratio is in line with the industry average.
- Compared to an average S&P500 Price/Earnings ratio of 28.60, XYL is valued at the same level.
- The Price/Forward Earnings ratio is 24.11, which indicates a rather expensive current valuation of XYL.
- The rest of the industry has a similar Price/Forward Earnings ratio as XYL.
- XYL is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 25.83, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28 | ||
| Fwd PE | 24.11 |
4.2 Price Multiples
- XYL's Enterprise Value to EBITDA ratio is in line with the industry average.
- XYL's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 37.62 | ||
| EV/EBITDA | 19.36 |
4.3 Compensation for Growth
- XYL's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- The decent profitability rating of XYL may justify a higher PE ratio.
- XYL's earnings are expected to grow with 13.26% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.44
PEG (5Y)3.88
EPS Next 2Y14.6%
EPS Next 3Y13.26%
5. Dividend
5.1 Amount
- XYL has a Yearly Dividend Yield of 1.15%.
- XYL's Dividend Yield is a higher than the industry average which is at 1.01.
- Compared to the average S&P500 Dividend Yield of 1.82, XYL is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.15% |
5.2 History
- On average, the dividend of XYL grows each year by 8.36%, which is quite nice.
- XYL has paid a dividend for at least 10 years, which is a reliable track record.
- XYL has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)8.36%
Div Incr Years13
Div Non Decr Years13
5.3 Sustainability
- XYL pays out 40.08% of its income as dividend. This is a bit on the high side, but may be sustainable.
- XYL's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP40.08%
EPS Next 2Y14.6%
EPS Next 3Y13.26%
XYLEM INC / XYL FAQ
Can you provide the ChartMill fundamental rating for XYLEM INC?
ChartMill assigns a fundamental rating of 5 / 10 to XYL.
Can you provide the valuation status for XYLEM INC?
ChartMill assigns a valuation rating of 3 / 10 to XYLEM INC (XYL). This can be considered as Overvalued.
What is the profitability of XYL stock?
XYLEM INC (XYL) has a profitability rating of 6 / 10.
What is the valuation of XYLEM INC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for XYLEM INC (XYL) is 28 and the Price/Book (PB) ratio is 2.94.
What is the expected EPS growth for XYLEM INC (XYL) stock?
The Earnings per Share (EPS) of XYLEM INC (XYL) is expected to grow by 19.47% in the next year.