Why WATTS WATER TECHNOLOGIES-A (NYSE:WTS) Deserves Consideration as a Quality Investment.

In this article we will dive into WATTS WATER TECHNOLOGIES-A (NYSE:WTS) as a possible candidate for quality investing. Investors should always do their own research, but we noticed WATTS WATER TECHNOLOGIES-A showing up in our Caviar Cruise quality screen, which makes it worth to investigate a bit more.

Highlighting Notable Quality Metrics of WTS.

• WTS has achieved substantial revenue growth over the past 5 years, with a 7.07% increase. This signifies the company's ability to successfully capture market opportunities and generate sustained revenue growth.
• With a robust ROIC excluding cash and goodwill at 46.56%, WTS showcases its effective allocation of capital and operational excellence. This metric signifies the company's ability to generate attractive returns and supports its long-term financial performance.
• The Debt/Free Cash Flow Ratio of WTS stands at 0.6, reflecting the company's prudent capital structure and cash flow dynamics. This ratio highlights the company's ability to generate robust free cash flow relative to its debt obligations.
• With a favorable Profit Quality (5-year) ratio of 110.0%, WTS showcases its ability to consistently deliver high-quality profits. This metric signifies the company's financial strength and its capacity to generate sustainable earnings over an extended period.
• The 5-year EBIT growth of WTS has been remarkable, with 14.57% increase. This demonstrates the company's ability to improve its operational efficiency and indicates its competitiveness within the market.
• WTS demonstrates a remarkable trend where its EBIT 5-year growth exceeds its Revenue 5-year growth. This indicates the company's ability to enhance its profitability through improved cost control and operational efficiency.

Fundamental Analysis Observations

ChartMill utilizes a proprietary algorithm to assign a Fundamental Rating to every stock. This rating, ranging from 0 to 10, is computed daily by analyzing a variety of fundamental indicators and properties.

Taking everything into account, WTS scores 7 out of 10 in our fundamental rating. WTS was compared to 129 industry peers in the Machinery industry. WTS gets an excellent profitability rating and is at the same time showing great financial health properties. WTS is not valued too expensively and it also shows a decent growth rate.

Check the latest full fundamental report of WTS for a complete fundamental analysis.

More ideas for quality investing can be found on ChartMill in our Caviar Cruise screen.

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.