WATTS WATER TECHNOLOGIES-A (WTS) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:WTS - US9427491025 - Common Stock
293.93 USD
-3.7 (-1.24%)
We assign a fundamental rating of 7 out of 10 to WTS. WTS was compared to 132 industry peers in the Machinery industry. WTS has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. While showing a medium growth rate, WTS is valued expensive at the moment. These ratings could make WTS a good candidate for quality investing.
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.
- Each year in the past 5 years WTS has been profitable.
- In the past 5 years WTS always reported a positive cash flow from operatings.
1.2 Ratios
- The Return On Assets of WTS (11.91%) is better than 85.61% of its industry peers.
- Looking at the Return On Equity, with a value of 16.59%, WTS is in the better half of the industry, outperforming 77.27% of the companies in the same industry.
- WTS has a better Return On Invested Capital (14.86%) than 87.12% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for WTS is above the industry average of 10.24%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.91% | ||
| ROE | 16.59% | ||
| ROIC | 14.86% |
ROA(3y)12.17%
ROA(5y)10.41%
ROE(3y)17.9%
ROE(5y)15.7%
ROIC(3y)14.98%
ROIC(5y)13.71%
1.3 Margins
- WTS has a Profit Margin of 13.79%. This is amongst the best in the industry. WTS outperforms 83.33% of its industry peers.
- WTS's Profit Margin has improved in the last couple of years.
- Looking at the Operating Margin, with a value of 18.98%, WTS belongs to the top of the industry, outperforming 87.12% of the companies in the same industry.
- WTS's Operating Margin has improved in the last couple of years.
- The Gross Margin of WTS (48.83%) is better than 91.67% of its industry peers.
- In the last couple of years the Gross Margin of WTS has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 18.98% | ||
| PM (TTM) | 13.79% | ||
| GM | 48.83% |
OM growth 3Y7.25%
OM growth 5Y7.01%
PM growth 3Y12.18%
PM growth 5Y9.49%
GM growth 3Y3.61%
GM growth 5Y2.18%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so WTS is still creating some value.
- The number of shares outstanding for WTS remains at a similar level compared to 1 year ago.
- WTS has less shares outstanding than it did 5 years ago.
- WTS has a better debt/assets ratio than last year.
2.2 Solvency
- WTS has an Altman-Z score of 10.23. This indicates that WTS is financially healthy and has little risk of bankruptcy at the moment.
- The Altman-Z score of WTS (10.23) is better than 93.18% of its industry peers.
- The Debt to FCF ratio of WTS is 0.57, which is an excellent value as it means it would take WTS, only 0.57 years of fcf income to pay off all of its debts.
- The Debt to FCF ratio of WTS (0.57) is better than 90.91% of its industry peers.
- WTS has a Debt/Equity ratio of 0.10. This is a healthy value indicating a solid balance between debt and equity.
- WTS has a better Debt to Equity ratio (0.10) than 78.79% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.1 | ||
| Debt/FCF | 0.57 | ||
| Altman-Z | 10.23 |
ROIC/WACC1.55
WACC9.57%
2.3 Liquidity
- WTS has a Current Ratio of 2.83. This indicates that WTS is financially healthy and has no problem in meeting its short term obligations.
- With a decent Current ratio value of 2.83, WTS is doing good in the industry, outperforming 74.24% of the companies in the same industry.
- A Quick Ratio of 1.84 indicates that WTS should not have too much problems paying its short term obligations.
- Looking at the Quick ratio, with a value of 1.84, WTS is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.83 | ||
| Quick Ratio | 1.84 |
3. Growth
3.1 Past
- WTS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 13.88%, which is quite good.
- WTS shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 16.86% yearly.
- Looking at the last year, WTS shows a small growth in Revenue. The Revenue has grown by 4.18% in the last year.
- WTS shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.07% yearly.
EPS 1Y (TTM)13.88%
EPS 3Y17.06%
EPS 5Y16.86%
EPS Q2Q%23.15%
Revenue 1Y (TTM)4.18%
Revenue growth 3Y7.57%
Revenue growth 5Y7.07%
Sales Q2Q%12.53%
3.2 Future
- The Earnings Per Share is expected to grow by 11.09% on average over the next years. This is quite good.
- Based on estimates for the next years, WTS will show a small growth in Revenue. The Revenue will grow by 6.18% on average per year.
EPS Next Y17.34%
EPS Next 2Y13.29%
EPS Next 3Y11.1%
EPS Next 5Y11.09%
Revenue Next Year7.75%
Revenue Next 2Y7.43%
Revenue Next 3Y6.26%
Revenue Next 5Y6.18%
3.3 Evolution
- The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 29.36, the valuation of WTS can be described as expensive.
- WTS's Price/Earnings is on the same level as the industry average.
- WTS is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 28.82, which is the current average of the S&P500 Index.
- Based on the Price/Forward Earnings ratio of 25.82, the valuation of WTS can be described as expensive.
- WTS's Price/Forward Earnings ratio is in line with the industry average.
- WTS is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 25.95, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.36 | ||
| Fwd PE | 25.82 |
4.2 Price Multiples
- WTS's Enterprise Value to EBITDA is on the same level as the industry average.
- WTS's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.54 | ||
| EV/EBITDA | 19.24 |
4.3 Compensation for Growth
- The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- WTS has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)1.69
PEG (5Y)1.74
EPS Next 2Y13.29%
EPS Next 3Y11.1%
5. Dividend
5.1 Amount
- With a yearly dividend of 0.72%, WTS is not a good candidate for dividend investing.
- Compared to an average industry Dividend Yield of 1.01, WTS has a dividend in line with its industry peers.
- Compared to an average S&P500 Dividend Yield of 1.82, WTS's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.72% |
5.2 History
- On average, the dividend of WTS grows each year by 12.49%, which is quite nice.
- 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)12.49%
Div Incr Years12
Div Non Decr Years23
5.3 Sustainability
- WTS pays out 19.65% of its income as dividend. This is a sustainable payout ratio.
- WTS's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP19.65%
EPS Next 2Y13.29%
EPS Next 3Y11.1%
WATTS WATER TECHNOLOGIES-A / WTS FAQ
Can you provide the ChartMill fundamental rating for WATTS WATER TECHNOLOGIES-A?
ChartMill assigns a fundamental rating of 7 / 10 to WTS.
What is the valuation status of WATTS WATER TECHNOLOGIES-A (WTS) stock?
ChartMill assigns a valuation rating of 3 / 10 to WATTS WATER TECHNOLOGIES-A (WTS). This can be considered as Overvalued.
How profitable is WATTS WATER TECHNOLOGIES-A (WTS) stock?
WATTS WATER TECHNOLOGIES-A (WTS) has a profitability rating of 9 / 10.
What is the valuation of WATTS WATER TECHNOLOGIES-A based on its PE and PB ratios?
The Price/Earnings (PE) ratio for WATTS WATER TECHNOLOGIES-A (WTS) is 29.36 and the Price/Book (PB) ratio is 5.01.
What is the earnings growth outlook for WATTS WATER TECHNOLOGIES-A?
The Earnings per Share (EPS) of WATTS WATER TECHNOLOGIES-A (WTS) is expected to grow by 17.34% in the next year.