ZURN ELKAY WATER SOLUTIONS C (ZWS) Stock Fundamental Analysis
NYSE:ZWS - New York Stock Exchange, Inc. - US98983L1089 - Common Stock
Overall ZWS gets a fundamental rating of 5 out of 10. We evaluated ZWS against 41 industry peers in the Building Products industry. ZWS has an excellent financial health rating, but there are some minor concerns on its profitability. While showing a medium growth rate, ZWS is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
In the past year ZWS was profitable.
In the past year ZWS had a positive cash flow from operations.
ZWS had positive earnings in each of the past 5 years.
ZWS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ZWS's Return On Assets of 5.09% is on the low side compared to the rest of the industry. ZWS is outperformed by 62.50% of its industry peers.
With a Return On Equity value of 8.68%, ZWS is not doing good in the industry: 62.50% of the companies in the same industry are doing better.
ZWS has a Return On Invested Capital of 7.24%. This is in the lower half of the industry: ZWS underperforms 65.00% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ZWS is significantly below the industry average of 13.18%.
The 3 year average ROIC (6.23%) for ZWS is below the current ROIC(7.24%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.09% | ||
| ROE | 8.68% | ||
| ROIC | 7.24% |
ROA(3y)5.87%
ROA(5y)4.5%
ROE(3y)35.5%
ROE(5y)24.01%
ROIC(3y)6.23%
ROIC(5y)6.81%
1.3 Margins
ZWS's Profit Margin of 8.87% is in line compared to the rest of the industry. ZWS outperforms 52.50% of its industry peers.
In the last couple of years the Profit Margin of ZWS has grown nicely.
Looking at the Operating Margin, with a value of 16.27%, ZWS is in line with its industry, outperforming 55.00% of the companies in the same industry.
ZWS's Operating Margin has been stable in the last couple of years.
The Gross Margin of ZWS (45.20%) is better than 95.00% of its industry peers.
In the last couple of years the Gross Margin of ZWS has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.27% | ||
| PM (TTM) | 8.87% | ||
| GM | 45.2% |
OM growth 3Y-5.55%
OM growth 5Y-1.22%
PM growth 3Y-2.77%
PM growth 5Y20.94%
GM growth 3Y2.3%
GM growth 5Y2.11%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ZWS is destroying value.
ZWS has less shares outstanding than it did 1 year ago.
The number of shares outstanding for ZWS has been increased compared to 5 years ago.
Compared to 1 year ago, ZWS has an improved debt to assets ratio.
2.2 Solvency
ZWS has an Altman-Z score of 4.02. This indicates that ZWS is financially healthy and has little risk of bankruptcy at the moment.
ZWS has a Altman-Z score of 4.02. This is comparable to the rest of the industry: ZWS outperforms 47.50% of its industry peers.
The Debt to FCF ratio of ZWS is 1.84, which is an excellent value as it means it would take ZWS, only 1.84 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 1.84, ZWS is doing good in the industry, outperforming 70.00% of the companies in the same industry.
A Debt/Equity ratio of 0.31 indicates that ZWS is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.31, ZWS is in the better half of the industry, outperforming 62.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.31 | ||
| Debt/FCF | 1.84 | ||
| Altman-Z | 4.02 |
ROIC/WACC0.68
WACC10.61%
2.3 Liquidity
ZWS has a Current Ratio of 2.70. This indicates that ZWS is financially healthy and has no problem in meeting its short term obligations.
ZWS has a better Current ratio (2.70) than 70.00% of its industry peers.
ZWS has a Quick Ratio of 1.71. This is a normal value and indicates that ZWS is financially healthy and should not expect problems in meeting its short term obligations.
With a decent Quick ratio value of 1.71, ZWS is doing good in the industry, outperforming 67.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.7 | ||
| Quick Ratio | 1.71 |
3. Growth
3.1 Past
ZWS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 40.23%, which is quite impressive.
Measured over the past 5 years, ZWS shows a small growth in Earnings Per Share. The EPS has been growing by 7.94% on average per year.
Looking at the last year, ZWS shows a small growth in Revenue. The Revenue has grown by 2.55% in the last year.
The Revenue has been decreasing by -3.74% on average over the past years.
EPS 1Y (TTM)40.23%
EPS 3Y-22.43%
EPS 5Y7.94%
EPS Q2Q%17.24%
Revenue 1Y (TTM)2.55%
Revenue growth 3Y-9.55%
Revenue growth 5Y-3.74%
Sales Q2Q%2.91%
3.2 Future
The Earnings Per Share is expected to grow by 13.64% on average over the next years. This is quite good.
Based on estimates for the next years, ZWS will show a small growth in Revenue. The Revenue will grow by 4.66% on average per year.
EPS Next Y28.98%
EPS Next 2Y18.23%
EPS Next 3Y15.95%
EPS Next 5Y13.64%
Revenue Next Year2.53%
Revenue Next 2Y3.13%
Revenue Next 3Y4%
Revenue Next 5Y4.66%
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 accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 31.94 indicates a quite expensive valuation of ZWS.
ZWS's Price/Earnings ratio is a bit more expensive when compared to the industry. ZWS is more expensive than 70.00% of the companies in the same industry.
When comparing the Price/Earnings ratio of ZWS to the average of the S&P500 Index (28.29), we can say ZWS is valued inline with the index average.
A Price/Forward Earnings ratio of 28.74 indicates a quite expensive valuation of ZWS.
ZWS's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. ZWS is more expensive than 67.50% of the companies in the same industry.
ZWS's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 24.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.94 | ||
| Fwd PE | 28.74 |
4.2 Price Multiples
67.50% of the companies in the same industry are cheaper than ZWS, based on the Enterprise Value to EBITDA ratio.
The rest of the industry has a similar Price/Free Cash Flow ratio as ZWS.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.49 | ||
| EV/EBITDA | 20.33 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
ZWS's earnings are expected to grow with 15.95% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.1
PEG (5Y)4.02
EPS Next 2Y18.23%
EPS Next 3Y15.95%
5. Dividend
5.1 Amount
With a yearly dividend of 0.95%, ZWS is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.05, ZWS pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.28, ZWS's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.95% |
5.2 History
The dividend of ZWS has a limited annual growth rate of 5.27%.
ZWS has been paying a dividend for over 5 years, so it has already some track record.
ZWS has decreased its dividend recently.
Dividend Growth(5Y)5.27%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
40.01% of the earnings are spent on dividend by ZWS. This is a bit on the high side, but may be sustainable.
The dividend of ZWS is growing, but earnings are growing more, so the dividend growth is sustainable.
DP40.01%
EPS Next 2Y18.23%
EPS Next 3Y15.95%
ZURN ELKAY WATER SOLUTIONS C
NYSE:ZWS (1/22/2025, 11:47:51 AM)
38.97
+0.13 (+0.33%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners85.28%
Inst Owner Change-0.13%
Ins Owners2.16%
Ins Owner Change0.44%
Market Cap6.61B
Analysts73.33
Price Target40.22 (3.21%)
Short Float %5.09%
Short Ratio7.84
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.95% |
Yearly Dividend0.29
Dividend Growth(5Y)5.27%
DP40.01%
Div Incr Years1
Div Non Decr Years1
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.34%
Min EPS beat(2)3.96%
Max EPS beat(2)4.73%
EPS beat(4)4
Avg EPS beat(4)7.91%
Min EPS beat(4)3.96%
Max EPS beat(4)11.92%
EPS beat(8)7
Avg EPS beat(8)6.97%
EPS beat(12)11
Avg EPS beat(12)14.7%
EPS beat(16)15
Avg EPS beat(16)20.77%
Revenue beat(2)1
Avg Revenue beat(2)-0.13%
Min Revenue beat(2)-0.29%
Max Revenue beat(2)0.02%
Revenue beat(4)3
Avg Revenue beat(4)0.21%
Min Revenue beat(4)-0.29%
Max Revenue beat(4)0.81%
Revenue beat(8)5
Avg Revenue beat(8)0.73%
Revenue beat(12)7
Avg Revenue beat(12)0.55%
Revenue beat(16)7
Avg Revenue beat(16)-20.94%
PT rev (1m)1.85%
PT rev (3m)9.52%
EPS NQ rev (1m)0%
EPS NQ rev (3m)7.73%
EPS NY rev (1m)0%
EPS NY rev (3m)2.8%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.53%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.38%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.94 | ||
| Fwd PE | 28.74 | ||
| P/S | 4.26 | ||
| P/FCF | 24.49 | ||
| P/OCF | 22.96 | ||
| P/B | 4.17 | ||
| P/tB | N/A | ||
| EV/EBITDA | 20.33 |
EPS(TTM)1.22
EY3.13%
EPS(NY)1.36
Fwd EY3.48%
FCF(TTM)1.59
FCFY4.08%
OCF(TTM)1.7
OCFY4.36%
SpS9.15
BVpS9.35
TBVpS-0.7
PEG (NY)1.1
PEG (5Y)4.02
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.09% | ||
| ROE | 8.68% | ||
| ROCE | 10.41% | ||
| ROIC | 7.24% | ||
| ROICexc | 7.85% | ||
| ROICexgc | 32.95% | ||
| OM | 16.27% | ||
| PM (TTM) | 8.87% | ||
| GM | 45.2% | ||
| FCFM | 17.39% |
ROA(3y)5.87%
ROA(5y)4.5%
ROE(3y)35.5%
ROE(5y)24.01%
ROIC(3y)6.23%
ROIC(5y)6.81%
ROICexc(3y)6.81%
ROICexc(5y)7.67%
ROICexgc(3y)21.63%
ROICexgc(5y)25.17%
ROCE(3y)8.97%
ROCE(5y)9.8%
ROICexcg growth 3Y-5.38%
ROICexcg growth 5Y6.08%
ROICexc growth 3Y-11.15%
ROICexc growth 5Y-1.34%
OM growth 3Y-5.55%
OM growth 5Y-1.22%
PM growth 3Y-2.77%
PM growth 5Y20.94%
GM growth 3Y2.3%
GM growth 5Y2.11%
F-Score8
Asset Turnover0.57
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.31 | ||
| Debt/FCF | 1.84 | ||
| Debt/EBITDA | 1.46 | ||
| Cap/Depr | 20.85% | ||
| Cap/Sales | 1.17% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 84.89% | ||
| Profit Quality | 196.08% | ||
| Current Ratio | 2.7 | ||
| Quick Ratio | 1.71 | ||
| Altman-Z | 4.02 |
F-Score8
WACC10.61%
ROIC/WACC0.68
Cap/Depr(3y)22.75%
Cap/Depr(5y)32.94%
Cap/Sales(3y)1.51%
Cap/Sales(5y)1.75%
Profit Quality(3y)172.32%
Profit Quality(5y)518.58%
High Growth Momentum
Growth
EPS 1Y (TTM)40.23%
EPS 3Y-22.43%
EPS 5Y7.94%
EPS Q2Q%17.24%
EPS Next Y28.98%
EPS Next 2Y18.23%
EPS Next 3Y15.95%
EPS Next 5Y13.64%
Revenue 1Y (TTM)2.55%
Revenue growth 3Y-9.55%
Revenue growth 5Y-3.74%
Sales Q2Q%2.91%
Revenue Next Year2.53%
Revenue Next 2Y3.13%
Revenue Next 3Y4%
Revenue Next 5Y4.66%
EBIT growth 1Y31.15%
EBIT growth 3Y-14.57%
EBIT growth 5Y-4.91%
EBIT Next Year54.1%
EBIT Next 3Y21.14%
EBIT Next 5Y15.99%
FCF growth 1Y1830.77%
FCF growth 3Y-3.3%
FCF growth 5Y4.37%
OCF growth 1Y3101.04%
OCF growth 3Y-5.26%
OCF growth 5Y2.13%