WATTS WATER TECHNOLOGIES-A (WTS) Stock Fundamental Analysis
NYSE:WTS - New York Stock Exchange, Inc. - US9427491025 - Common Stock - Currency: USD
Overall WTS gets a fundamental rating of 6 out of 10. We evaluated WTS against 128 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. WTS is valued expensive and it does not seem to be growing.
1. Profitability
1.1 Basic Checks
WTS had positive earnings in the past year.
WTS had a positive operating cash flow in the past year.
Each year in the past 5 years WTS has been profitable.
WTS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 11.70%, WTS belongs to the top of the industry, outperforming 85.94% of the companies in the same industry.
Looking at the Return On Equity, with a value of 16.52%, WTS is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 14.84%, WTS belongs to the top of the industry, outperforming 85.94% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for WTS is above the industry average of 10.80%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.7% | ||
| ROE | 16.52% | ||
| ROIC | 14.84% |
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's Profit Margin of 13.07% is amongst the best of the industry. WTS outperforms 82.81% of its industry peers.
In the last couple of years the Profit Margin of WTS has grown nicely.
WTS has a better Operating Margin (18.07%) than 84.38% of its industry peers.
In the last couple of years the Operating Margin of WTS has grown nicely.
The Gross Margin of WTS (47.65%) is better than 88.28% of its industry peers.
WTS's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 18.07% | ||
| PM (TTM) | 13.07% | ||
| GM | 47.65% |
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
WTS has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
WTS has about the same amout of shares outstanding than it did 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 9.63. This indicates that WTS is financially healthy and has little risk of bankruptcy at the moment.
WTS's Altman-Z score of 9.63 is amongst the best of the industry. WTS outperforms 92.97% of its industry peers.
The Debt to FCF ratio of WTS is 0.59, which is an excellent value as it means it would take WTS, only 0.59 years of fcf income to pay off all of its debts.
WTS has a Debt to FCF ratio of 0.59. This is amongst the best in the industry. WTS outperforms 89.84% of its industry peers.
WTS has a Debt/Equity ratio of 0.11. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of WTS (0.11) is better than 76.56% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.11 | ||
| Debt/FCF | 0.59 | ||
| Altman-Z | 9.63 |
ROIC/WACC1.58
WACC9.41%
2.3 Liquidity
WTS has a Current Ratio of 2.46. This indicates that WTS is financially healthy and has no problem in meeting its short term obligations.
With a decent Current ratio value of 2.46, WTS is doing good in the industry, outperforming 63.28% of the companies in the same industry.
WTS has a Quick Ratio of 1.53. This is a normal value and indicates that WTS is financially healthy and should not expect problems in meeting its short term obligations.
WTS's Quick ratio of 1.53 is fine compared to the rest of the industry. WTS outperforms 66.41% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.46 | ||
| Quick Ratio | 1.53 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 2.65% over the past year.
The Earnings Per Share has been growing by 16.86% on average over the past years. This is quite good.
Looking at the last year, WTS shows a small growth in Revenue. The Revenue has grown by 3.89% 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)2.65%
EPS 3Y17.06%
EPS 5Y16.86%
EPS Q2Q%1.72%
Revenue 1Y (TTM)3.89%
Revenue growth 3Y7.57%
Revenue growth 5Y7.07%
Sales Q2Q%-2.26%
3.2 Future
The Earnings Per Share is expected to grow by 7.00% on average over the next years.
Based on estimates for the next years, WTS will show a small growth in Revenue. The Revenue will grow by 3.69% on average per year.
EPS Next Y6.47%
EPS Next 2Y6.69%
EPS Next 3Y6.39%
EPS Next 5Y7%
Revenue Next Year1.89%
Revenue Next 2Y2.8%
Revenue Next 3Y2.96%
Revenue Next 5Y3.69%
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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
WTS is valuated quite expensively with a Price/Earnings ratio of 29.60.
The rest of the industry has a similar Price/Earnings ratio as WTS.
Compared to an average S&P500 Price/Earnings ratio of 27.03, WTS is valued at the same level.
The Price/Forward Earnings ratio is 26.12, which means the current valuation is very expensive for WTS.
The rest of the industry has a similar Price/Forward Earnings ratio as WTS.
Compared to an average S&P500 Price/Forward Earnings ratio of 36.28, WTS is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.6 | ||
| Fwd PE | 26.12 |
4.2 Price Multiples
WTS's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. WTS is more expensive than 60.94% of the companies in the same industry.
WTS's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.21 | ||
| EV/EBITDA | 18.71 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates WTS does not grow enough to justify the current Price/Earnings ratio.
WTS has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)4.58
PEG (5Y)1.76
EPS Next 2Y6.69%
EPS Next 3Y6.39%
5. Dividend
5.1 Amount
With a yearly dividend of 0.79%, WTS is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.92, WTS has a dividend in line with its industry peers.
With a Dividend Yield of 0.79, WTS pays less dividend than the S&P500 average, which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.79% |
5.2 History
The dividend of WTS is nicely growing with an annual growth rate of 12.49%!
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
19.75% of the earnings are spent on dividend by WTS. This is a low number and sustainable payout ratio.
The dividend of WTS is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP19.75%
EPS Next 2Y6.69%
EPS Next 3Y6.39%
263.74
+2.09 (+0.8%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners99.18%
Inst Owner Change1.49%
Ins Owners1.04%
Ins Owner Change0.56%
Market Cap8.80B
Analysts69.23
Price Target249.59 (-5.37%)
Short Float %3.29%
Short Ratio4.97
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.79% |
Yearly Dividend1.67
Dividend Growth(5Y)12.49%
DP19.75%
Div Incr Years12
Div Non Decr Years23
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)8.51%
Min EPS beat(2)6.27%
Max EPS beat(2)10.75%
EPS beat(4)4
Avg EPS beat(4)5.69%
Min EPS beat(4)1.22%
Max EPS beat(4)10.75%
EPS beat(8)8
Avg EPS beat(8)8.27%
EPS beat(12)12
Avg EPS beat(12)10.69%
EPS beat(16)16
Avg EPS beat(16)10.8%
Revenue beat(2)1
Avg Revenue beat(2)0.24%
Min Revenue beat(2)-0.41%
Max Revenue beat(2)0.9%
Revenue beat(4)2
Avg Revenue beat(4)0.02%
Min Revenue beat(4)-0.73%
Max Revenue beat(4)0.9%
Revenue beat(8)6
Avg Revenue beat(8)0.72%
Revenue beat(12)9
Avg Revenue beat(12)1.19%
Revenue beat(16)13
Avg Revenue beat(16)2.09%
PT rev (1m)4.66%
PT rev (3m)11.91%
EPS NQ rev (1m)0.81%
EPS NQ rev (3m)4.8%
EPS NY rev (1m)0.77%
EPS NY rev (3m)2.72%
Revenue NQ rev (1m)0.58%
Revenue NQ rev (3m)2.67%
Revenue NY rev (1m)0.39%
Revenue NY rev (3m)1.4%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.6 | ||
| Fwd PE | 26.12 | ||
| P/S | 3.93 | ||
| P/FCF | 26.21 | ||
| P/OCF | 23.75 | ||
| P/B | 4.97 | ||
| P/tB | 11.58 | ||
| EV/EBITDA | 18.71 |
EPS(TTM)8.91
EY3.38%
EPS(NY)10.1
Fwd EY3.83%
FCF(TTM)10.06
FCFY3.82%
OCF(TTM)11.11
OCFY4.21%
SpS67.09
BVpS53.09
TBVpS22.77
PEG (NY)4.58
PEG (5Y)1.76
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.7% | ||
| ROE | 16.52% | ||
| ROCE | 19.73% | ||
| ROIC | 14.84% | ||
| ROICexc | 17.75% | ||
| ROICexgc | 43.33% | ||
| OM | 18.07% | ||
| PM (TTM) | 13.07% | ||
| GM | 47.65% | ||
| FCFM | 15% |
ROA(3y)12.17%
ROA(5y)10.41%
ROE(3y)17.9%
ROE(5y)15.7%
ROIC(3y)14.98%
ROIC(5y)13.71%
ROICexc(3y)18.57%
ROICexc(5y)16.78%
ROICexgc(3y)44.6%
ROICexgc(5y)41.23%
ROCE(3y)19.91%
ROCE(5y)18.23%
ROICexcg growth 3Y4.4%
ROICexcg growth 5Y1.57%
ROICexc growth 3Y5.14%
ROICexc growth 5Y6.09%
OM growth 3Y7.25%
OM growth 5Y7.01%
PM growth 3Y12.18%
PM growth 5Y9.49%
GM growth 3Y3.61%
GM growth 5Y2.18%
F-Score7
Asset Turnover0.9
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.11 | ||
| Debt/FCF | 0.59 | ||
| Debt/EBITDA | 0.43 | ||
| Cap/Depr | 63.5% | ||
| Cap/Sales | 1.55% | ||
| Interest Coverage | 34 | ||
| Cash Conversion | 80.69% | ||
| Profit Quality | 114.76% | ||
| Current Ratio | 2.46 | ||
| Quick Ratio | 1.53 | ||
| Altman-Z | 9.63 |
F-Score7
WACC9.41%
ROIC/WACC1.58
Cap/Depr(3y)68.09%
Cap/Depr(5y)71.53%
Cap/Sales(3y)1.48%
Cap/Sales(5y)1.76%
Profit Quality(3y)99.01%
Profit Quality(5y)110.38%
High Growth Momentum
Growth
EPS 1Y (TTM)2.65%
EPS 3Y17.06%
EPS 5Y16.86%
EPS Q2Q%1.72%
EPS Next Y6.47%
EPS Next 2Y6.69%
EPS Next 3Y6.39%
EPS Next 5Y7%
Revenue 1Y (TTM)3.89%
Revenue growth 3Y7.57%
Revenue growth 5Y7.07%
Sales Q2Q%-2.26%
Revenue Next Year1.89%
Revenue Next 2Y2.8%
Revenue Next 3Y2.96%
Revenue Next 5Y3.69%
EBIT growth 1Y9.38%
EBIT growth 3Y15.37%
EBIT growth 5Y14.57%
EBIT Next Year19.44%
EBIT Next 3Y10.1%
EBIT Next 5Y9.88%
FCF growth 1Y44.91%
FCF growth 3Y28.35%
FCF growth 5Y14.6%
OCF growth 1Y42.91%
OCF growth 3Y25.93%
OCF growth 5Y13.23%