WATTS WATER TECHNOLOGIES-A (WTS) Stock Fundamental Analysis
NYSE:WTS - New York Stock Exchange, Inc. - US9427491025 - Common Stock - Currency: USD
Taking everything into account, WTS scores 7 out of 10 in our fundamental rating. WTS was compared to 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. While showing a medium growth rate, WTS is valued expensive at the moment.
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.
WTS had positive earnings in each of the past 5 years.
WTS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
WTS's Return On Assets of 12.15% is amongst the best of the industry. WTS outperforms 86.72% of its industry peers.
WTS's Return On Equity of 17.06% is fine compared to the rest of the industry. WTS outperforms 75.78% of its industry peers.
WTS has a better Return On Invested Capital (15.11%) than 86.72% of its industry peers.
WTS had an Average Return On Invested Capital over the past 3 years of 14.98%. This is above the industry average of 10.65%.
The last Return On Invested Capital (15.11%) for WTS is above the 3 year average (14.98%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.15% | ||
| ROE | 17.06% | ||
| ROIC | 15.11% |
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
The Profit Margin of WTS (12.93%) is better than 82.81% of its industry peers.
WTS's Profit Margin has improved in the last couple of years.
WTS has a better Operating Margin (17.65%) than 84.38% of its industry peers.
In the last couple of years the Operating Margin of WTS has grown nicely.
WTS has a Gross Margin of 47.15%. This is amongst the best in the industry. WTS outperforms 88.28% of its industry peers.
WTS's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.65% | ||
| PM (TTM) | 12.93% | ||
| GM | 47.15% |
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.
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.
Compared to 1 year ago, WTS has an improved debt to assets ratio.
2.2 Solvency
WTS has an Altman-Z score of 8.72. This indicates that WTS is financially healthy and has little risk of bankruptcy at the moment.
WTS has a Altman-Z score of 8.72. This is amongst the best in the industry. WTS outperforms 92.19% of its industry peers.
WTS has a debt to FCF ratio of 0.60. This is a very positive value and a sign of high solvency as it would only need 0.60 years to pay back of all of its debts.
WTS's Debt to FCF ratio of 0.60 is amongst the best of the industry. WTS outperforms 88.28% of its industry peers.
A Debt/Equity ratio of 0.12 indicates that WTS is not too dependend on debt financing.
WTS's Debt to Equity ratio of 0.12 is fine compared to the rest of the industry. WTS outperforms 76.56% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.12 | ||
| Debt/FCF | 0.6 | ||
| Altman-Z | 8.72 |
ROIC/WACC1.5
WACC10.05%
2.3 Liquidity
WTS has a Current Ratio of 2.59. This indicates that WTS is financially healthy and has no problem in meeting its short term obligations.
WTS has a Current ratio of 2.59. This is in the better half of the industry: WTS outperforms 67.97% of its industry peers.
WTS has a Quick Ratio of 1.65. 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 1.65 is fine compared to the rest of the industry. WTS outperforms 69.53% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.59 | ||
| Quick Ratio | 1.65 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 7.26% over the past year.
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 quite strong growth in Revenue. The Revenue has grown by 9.53% 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)7.26%
EPS 3Y17.06%
EPS 5Y16.86%
EPS Q2Q%4.06%
Revenue 1Y (TTM)9.53%
Revenue growth 3Y7.57%
Revenue growth 5Y7.07%
Sales Q2Q%-1.3%
3.2 Future
WTS is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.00% yearly.
WTS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.68% yearly.
EPS Next Y3.65%
EPS Next 2Y5.26%
EPS Next 3Y5.56%
EPS Next 5Y7%
Revenue Next Year0.48%
Revenue Next 2Y2.01%
Revenue Next 3Y2.34%
Revenue Next 5Y3.68%
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
With a Price/Earnings ratio of 23.88, WTS is valued on the expensive side.
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 28.10, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 23.04, WTS is valued on the expensive side.
WTS's Price/Forward Earnings is on the same level as the industry average.
When comparing the Price/Forward Earnings ratio of WTS to the average of the S&P500 Index (20.74), we can say WTS is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.88 | ||
| Fwd PE | 23.04 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as WTS.
WTS's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.7 | ||
| EV/EBITDA | 15.36 |
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)6.55
PEG (5Y)1.42
EPS Next 2Y5.26%
EPS Next 3Y5.56%
5. Dividend
5.1 Amount
WTS has a yearly dividend return of 0.82%, which is pretty low.
WTS's Dividend Yield is comparable with the industry average which is at 2.02.
Compared to an average S&P500 Dividend Yield of 2.43, WTS's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.82% |
5.2 History
The dividend of WTS is nicely growing with an annual growth rate of 12.49%!
WTS has been paying a dividend for at least 10 years, so it has a reliable track record.
WTS has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)12.49%
Div Incr Years12
Div Non Decr Years23
5.3 Sustainability
WTS pays out 19.05% 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.
DP19.05%
EPS Next 2Y5.26%
EPS Next 3Y5.56%
211.84
-1.83 (-0.86%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners101%
Inst Owner Change-0.98%
Ins Owners0.99%
Ins Owner Change-0.55%
Market Cap7.07B
Analysts72.31
Price Target223.04 (5.29%)
Short Float %3.13%
Short Ratio4.17
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.82% |
Yearly Dividend1.67
Dividend Growth(5Y)12.49%
DP19.05%
Div Incr Years12
Div Non Decr Years23
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.74%
Min EPS beat(2)1.22%
Max EPS beat(2)6.27%
EPS beat(4)4
Avg EPS beat(4)5.43%
Min EPS beat(4)1.22%
Max EPS beat(4)9.7%
EPS beat(8)8
Avg EPS beat(8)8.94%
EPS beat(12)12
Avg EPS beat(12)11.27%
EPS beat(16)16
Avg EPS beat(16)11.56%
Revenue beat(2)0
Avg Revenue beat(2)-0.57%
Min Revenue beat(2)-0.73%
Max Revenue beat(2)-0.41%
Revenue beat(4)2
Avg Revenue beat(4)0.62%
Min Revenue beat(4)-0.73%
Max Revenue beat(4)3.3%
Revenue beat(8)5
Avg Revenue beat(8)0.45%
Revenue beat(12)9
Avg Revenue beat(12)1.41%
Revenue beat(16)13
Avg Revenue beat(16)2.41%
PT rev (1m)0%
PT rev (3m)6.58%
EPS NQ rev (1m)0.12%
EPS NQ rev (3m)0.41%
EPS NY rev (1m)-0.38%
EPS NY rev (3m)2.24%
Revenue NQ rev (1m)0.09%
Revenue NQ rev (3m)-1.15%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.74%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.88 | ||
| Fwd PE | 23.04 | ||
| P/S | 3.14 | ||
| P/FCF | 21.7 | ||
| P/OCF | 19.58 | ||
| P/B | 4.14 | ||
| P/tB | 9.33 | ||
| EV/EBITDA | 15.36 |
EPS(TTM)8.87
EY4.19%
EPS(NY)9.19
Fwd EY4.34%
FCF(TTM)9.76
FCFY4.61%
OCF(TTM)10.82
OCFY5.11%
SpS67.47
BVpS51.17
TBVpS22.71
PEG (NY)6.55
PEG (5Y)1.42
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.15% | ||
| ROE | 17.06% | ||
| ROCE | 20.08% | ||
| ROIC | 15.11% | ||
| ROICexc | 18.78% | ||
| ROICexgc | 46.56% | ||
| OM | 17.65% | ||
| PM (TTM) | 12.93% | ||
| GM | 47.15% | ||
| FCFM | 14.47% |
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-Score8
Asset Turnover0.94
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.12 | ||
| Debt/FCF | 0.6 | ||
| Debt/EBITDA | 0.44 | ||
| Cap/Depr | 64.89% | ||
| Cap/Sales | 1.57% | ||
| Interest Coverage | 31.3 | ||
| Cash Conversion | 79.91% | ||
| Profit Quality | 111.84% | ||
| Current Ratio | 2.59 | ||
| Quick Ratio | 1.65 | ||
| Altman-Z | 8.72 |
F-Score8
WACC10.05%
ROIC/WACC1.5
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)7.26%
EPS 3Y17.06%
EPS 5Y16.86%
EPS Q2Q%4.06%
EPS Next Y3.65%
EPS Next 2Y5.26%
EPS Next 3Y5.56%
EPS Next 5Y7%
Revenue 1Y (TTM)9.53%
Revenue growth 3Y7.57%
Revenue growth 5Y7.07%
Sales Q2Q%-1.3%
Revenue Next Year0.48%
Revenue Next 2Y2.01%
Revenue Next 3Y2.34%
Revenue Next 5Y3.68%
EBIT growth 1Y11.53%
EBIT growth 3Y15.37%
EBIT growth 5Y14.57%
EBIT Next Year18.03%
EBIT Next 3Y9.62%
EBIT Next 5Y9.93%
FCF growth 1Y15.9%
FCF growth 3Y28.35%
FCF growth 5Y14.6%
OCF growth 1Y16.18%
OCF growth 3Y25.93%
OCF growth 5Y13.23%