ZURN ELKAY WATER SOLUTIONS C (ZWS) Stock Fundamental Analysis
NYSE:ZWS - New York Stock Exchange, Inc. - US98983L1089 - Common Stock - Currency: USD
Taking everything into account, ZWS scores 6 out of 10 in our fundamental rating. ZWS was compared to 41 industry peers in the Building Products industry. ZWS 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, ZWS is valued expensive at the moment. These ratings would make ZWS suitable for quality investing!
1. Profitability
1.1 Basic Checks
ZWS had positive earnings in the past year.
In the past year ZWS had a positive cash flow from operations.
ZWS had positive earnings in each of the past 5 years.
In the past 5 years ZWS always reported a positive cash flow from operatings.
1.2 Ratios
With a Return On Assets value of 6.50%, ZWS perfoms like the industry average, outperforming 51.22% of the companies in the same industry.
ZWS has a Return On Equity of 10.95%. This is comparable to the rest of the industry: ZWS outperforms 51.22% of its industry peers.
Looking at the Return On Invested Capital, with a value of 8.23%, ZWS is in line with its industry, outperforming 43.90% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ZWS is significantly below the industry average of 12.62%.
The last Return On Invested Capital (8.23%) for ZWS is above the 3 year average (6.01%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.5% | ||
| ROE | 10.95% | ||
| ROIC | 8.23% |
ROA(3y)4.14%
ROA(5y)5.64%
ROE(3y)6.98%
ROE(5y)25.85%
ROIC(3y)6.01%
ROIC(5y)7.19%
1.3 Margins
Looking at the Profit Margin, with a value of 10.72%, ZWS is in the better half of the industry, outperforming 63.41% of the companies in the same industry.
In the last couple of years the Profit Margin of ZWS has grown nicely.
The Operating Margin of ZWS (16.67%) is better than 63.41% of its industry peers.
In the last couple of years the Operating Margin of ZWS has remained more or less at the same level.
With an excellent Gross Margin value of 45.39%, ZWS belongs to the best of the industry, outperforming 95.12% of the companies in the same industry.
ZWS's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.67% | ||
| PM (TTM) | 10.72% | ||
| GM | 45.39% |
OM growth 3Y10.68%
OM growth 5Y1.24%
PM growth 3Y-8.32%
PM growth 5Y80%
GM growth 3Y3.28%
GM growth 5Y3.36%
2. Health
2.1 Basic Checks
ZWS has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
ZWS has less shares outstanding than it did 1 year ago.
ZWS has more shares outstanding than it did 5 years ago.
The debt/assets ratio for ZWS is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 4.07 indicates that ZWS is not in any danger for bankruptcy at the moment.
ZWS has a Altman-Z score (4.07) which is in line with its industry peers.
The Debt to FCF ratio of ZWS is 1.91, which is an excellent value as it means it would take ZWS, only 1.91 years of fcf income to pay off all of its debts.
ZWS has a better Debt to FCF ratio (1.91) than 78.05% of its industry peers.
A Debt/Equity ratio of 0.32 indicates that ZWS is not too dependend on debt financing.
ZWS has a better Debt to Equity ratio (0.32) than 65.85% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.32 | ||
| Debt/FCF | 1.91 | ||
| Altman-Z | 4.07 |
ROIC/WACC0.83
WACC9.96%
2.3 Liquidity
A Current Ratio of 2.87 indicates that ZWS has no problem at all paying its short term obligations.
ZWS has a Current ratio of 2.87. This is amongst the best in the industry. ZWS outperforms 80.49% of its industry peers.
ZWS has a Quick Ratio of 1.72. This is a normal value and indicates that ZWS is financially healthy and should not expect problems in meeting its short term obligations.
ZWS's Quick ratio of 1.72 is fine compared to the rest of the industry. ZWS outperforms 75.61% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.87 | ||
| Quick Ratio | 1.72 |
3. Growth
3.1 Past
ZWS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 20.37%, which is quite impressive.
ZWS shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 58.83% yearly.
The Revenue has been growing slightly by 3.22% in the past year.
ZWS shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -5.25% yearly.
EPS 1Y (TTM)20.37%
EPS 3Y-11.07%
EPS 5Y58.83%
EPS Q2Q%6.9%
Revenue 1Y (TTM)3.22%
Revenue growth 3Y19.81%
Revenue growth 5Y-5.25%
Sales Q2Q%4.01%
3.2 Future
The Earnings Per Share is expected to grow by 9.47% on average over the next years. This is quite good.
The Revenue is expected to grow by 4.49% on average over the next years.
EPS Next Y5.83%
EPS Next 2Y7.7%
EPS Next 3Y8.14%
EPS Next 5Y9.47%
Revenue Next Year3.55%
Revenue Next 2Y4.13%
Revenue Next 3Y4.21%
Revenue Next 5Y4.49%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 28.78, which means the current valuation is very expensive for ZWS.
Compared to the rest of the industry, the Price/Earnings ratio of ZWS indicates a slightly more expensive valuation: ZWS is more expensive than 68.29% of the companies listed in the same industry.
ZWS is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.30, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 25.20, the valuation of ZWS can be described as expensive.
Based on the Price/Forward Earnings ratio, ZWS is valued a bit more expensive than the industry average as 68.29% of the companies are valued more cheaply.
ZWS is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 21.76, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.78 | ||
| Fwd PE | 25.2 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ZWS is valued a bit more expensive than 63.41% of the companies in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as ZWS.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.2 | ||
| EV/EBITDA | 18.82 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ZWS does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of ZWS may justify a higher PE ratio.
PEG (NY)4.93
PEG (5Y)0.49
EPS Next 2Y7.7%
EPS Next 3Y8.14%
5. Dividend
5.1 Amount
With a yearly dividend of 0.96%, ZWS is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.14, ZWS pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.96, ZWS pays less dividend than the S&P500 average, which is at 2.37.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.96% |
5.2 History
The dividend of ZWS is nicely growing with an annual growth rate of 8.28%!
ZWS has been paying a dividend for over 5 years, so it has already some track record.
The dividend of ZWS decreased recently.
Dividend Growth(5Y)8.28%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
ZWS pays out 34.16% of its income as dividend. This is a sustainable payout ratio.
The dividend of ZWS is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP34.16%
EPS Next 2Y7.7%
EPS Next 3Y8.14%
37.41
+0.38 (+1.03%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners92.78%
Inst Owner Change0%
Ins Owners2.45%
Ins Owner Change-45.09%
Market Cap6.29B
Analysts75
Price Target37.74 (0.88%)
Short Float %3.07%
Short Ratio5.44
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.96% |
Yearly Dividend0.33
Dividend Growth(5Y)8.28%
DP34.16%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)9.79%
Min EPS beat(2)5.84%
Max EPS beat(2)13.74%
EPS beat(4)4
Avg EPS beat(4)7.07%
Min EPS beat(4)3.96%
Max EPS beat(4)13.74%
EPS beat(8)8
Avg EPS beat(8)7.89%
EPS beat(12)11
Avg EPS beat(12)7.49%
EPS beat(16)15
Avg EPS beat(16)21.77%
Revenue beat(2)2
Avg Revenue beat(2)0.24%
Min Revenue beat(2)0.17%
Max Revenue beat(2)0.3%
Revenue beat(4)3
Avg Revenue beat(4)0.05%
Min Revenue beat(4)-0.29%
Max Revenue beat(4)0.3%
Revenue beat(8)6
Avg Revenue beat(8)0.31%
Revenue beat(12)8
Avg Revenue beat(12)0.47%
Revenue beat(16)9
Avg Revenue beat(16)-5.77%
PT rev (1m)2.37%
PT rev (3m)-8.8%
EPS NQ rev (1m)-0.4%
EPS NQ rev (3m)-1.95%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.09%
Revenue NQ rev (1m)0.05%
Revenue NQ rev (3m)-0.12%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.06%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.78 | ||
| Fwd PE | 25.2 | ||
| P/S | 3.98 | ||
| P/FCF | 24.2 | ||
| P/OCF | 22.28 | ||
| P/B | 4.07 | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.82 |
EPS(TTM)1.3
EY3.48%
EPS(NY)1.48
Fwd EY3.97%
FCF(TTM)1.55
FCFY4.13%
OCF(TTM)1.68
OCFY4.49%
SpS9.4
BVpS9.2
TBVpS-0.73
PEG (NY)4.93
PEG (5Y)0.49
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.5% | ||
| ROE | 10.95% | ||
| ROCE | 11.15% | ||
| ROIC | 8.23% | ||
| ROICexc | 8.77% | ||
| ROICexgc | 35.46% | ||
| OM | 16.67% | ||
| PM (TTM) | 10.72% | ||
| GM | 45.39% | ||
| FCFM | 16.45% |
ROA(3y)4.14%
ROA(5y)5.64%
ROE(3y)6.98%
ROE(5y)25.85%
ROIC(3y)6.01%
ROIC(5y)7.19%
ROICexc(3y)6.44%
ROICexc(5y)8.06%
ROICexgc(3y)26.42%
ROICexgc(5y)27.95%
ROCE(3y)8.14%
ROCE(5y)9.74%
ROICexcg growth 3Y11.52%
ROICexcg growth 5Y3.59%
ROICexc growth 3Y-7.79%
ROICexc growth 5Y-1.06%
OM growth 3Y10.68%
OM growth 5Y1.24%
PM growth 3Y-8.32%
PM growth 5Y80%
GM growth 3Y3.28%
GM growth 5Y3.36%
F-Score7
Asset Turnover0.61
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.32 | ||
| Debt/FCF | 1.91 | ||
| Debt/EBITDA | 1.4 | ||
| Cap/Depr | 25.06% | ||
| Cap/Sales | 1.42% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 80.01% | ||
| Profit Quality | 153.45% | ||
| Current Ratio | 2.87 | ||
| Quick Ratio | 1.72 | ||
| Altman-Z | 4.07 |
F-Score7
WACC9.96%
ROIC/WACC0.83
Cap/Depr(3y)20.96%
Cap/Depr(5y)28.15%
Cap/Sales(3y)1.13%
Cap/Sales(5y)1.59%
Profit Quality(3y)173.63%
Profit Quality(5y)168.36%
High Growth Momentum
Growth
EPS 1Y (TTM)20.37%
EPS 3Y-11.07%
EPS 5Y58.83%
EPS Q2Q%6.9%
EPS Next Y5.83%
EPS Next 2Y7.7%
EPS Next 3Y8.14%
EPS Next 5Y9.47%
Revenue 1Y (TTM)3.22%
Revenue growth 3Y19.81%
Revenue growth 5Y-5.25%
Sales Q2Q%4.01%
Revenue Next Year3.55%
Revenue Next 2Y4.13%
Revenue Next 3Y4.21%
Revenue Next 5Y4.49%
EBIT growth 1Y13.66%
EBIT growth 3Y32.6%
EBIT growth 5Y-4.07%
EBIT Next Year41.5%
EBIT Next 3Y17.38%
EBIT Next 5Y15.35%
FCF growth 1Y80.75%
FCF growth 3Y10.7%
FCF growth 5Y4.97%
OCF growth 1Y81.21%
OCF growth 3Y9.49%
OCF growth 5Y2.6%