WATTS WATER TECHNOLOGIES-A (WTS)
US9427491025 - Common Stock
WTS gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 132 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 quite expensive at the moment. It does show a decent growth rate.
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.
In the past 5 years WTS has always been profitable.
Each year in the past 5 years WTS had a positive operating cash flow.
1.2 Ratios
WTS has a Return On Assets of 11.35%. This is amongst the best in the industry. WTS outperforms 86.05% of its industry peers.
Looking at the Return On Equity, with a value of 17.32%, WTS is in the better half of the industry, outperforming 74.42% of the companies in the same industry.
WTS has a better Return On Invested Capital (14.67%) than 83.72% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for WTS is above the industry average of 10.68%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.35% | ||
| ROE | 17.32% | ||
| ROIC | 14.67% |
ROA(3y)11.1%
ROA(5y)9.5%
ROE(3y)16.93%
ROE(5y)14.98%
ROIC(3y)15.03%
ROIC(5y)13.56%
1.3 Margins
Looking at the Profit Margin, with a value of 12.75%, WTS belongs to the top of the industry, outperforming 84.50% of the companies in the same industry.
WTS's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 17.33%, WTS belongs to the top of the industry, outperforming 82.17% of the companies in the same industry.
WTS's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 46.73%, WTS belongs to the top of the industry, outperforming 91.47% of the companies in the same industry.
In the last couple of years the Gross Margin of WTS has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.33% | ||
| PM (TTM) | 12.75% | ||
| GM | 46.73% |
OM growth 3Y10.65%
OM growth 5Y7.18%
PM growth 3Y18.93%
PM growth 5Y9.28%
GM growth 3Y4.07%
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.
The number of shares outstanding for WTS has been reduced compared to 5 years ago.
WTS has a worse debt/assets ratio than last year.
2.2 Solvency
WTS has an Altman-Z score of 7.65. This indicates that WTS is financially healthy and has little risk of bankruptcy at the moment.
WTS's Altman-Z score of 7.65 is amongst the best of the industry. WTS outperforms 88.37% of its industry peers.
WTS has a debt to FCF ratio of 1.06. This is a very positive value and a sign of high solvency as it would only need 1.06 years to pay back of all of its debts.
With an excellent Debt to FCF ratio value of 1.06, WTS belongs to the best of the industry, outperforming 89.15% of the companies in the same industry.
A Debt/Equity ratio of 0.20 indicates that WTS is not too dependend on debt financing.
The Debt to Equity ratio of WTS (0.20) is better than 72.09% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.2 | ||
| Debt/FCF | 1.06 | ||
| Altman-Z | 7.65 |
ROIC/WACC1.61
WACC9.09%
2.3 Liquidity
A Current Ratio of 2.61 indicates that WTS has no problem at all paying its short term obligations.
WTS's Current ratio of 2.61 is fine compared to the rest of the industry. WTS outperforms 68.22% of its industry peers.
A Quick Ratio of 1.63 indicates that WTS should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.63, WTS is in the better half of the industry, outperforming 71.32% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.61 | ||
| Quick Ratio | 1.63 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 15.99% over the past year.
Measured over the past years, WTS shows a quite strong growth in Earnings Per Share. The EPS has been growing by 17.20% on average per year.
The Revenue has been growing slightly by 3.88% in the past year.
Measured over the past years, WTS shows a small growth in Revenue. The Revenue has been growing by 5.61% on average per year.
EPS 1Y (TTM)15.99%
EPS 3Y28.58%
EPS 5Y17.2%
EPS growth Q2Q23.12%
Revenue 1Y (TTM)3.88%
Revenue growth 3Y10.88%
Revenue growth 5Y5.61%
Revenue growth Q2Q9.09%
3.2 Future
Based on estimates for the next years, WTS will show a small growth in Earnings Per Share. The EPS will grow by 7.41% on average per year.
The Revenue is expected to grow by 6.74% on average over the next years.
EPS Next Y4.3%
EPS Next 2Y5.46%
EPS Next 3Y6.32%
EPS Next 5Y7.41%
Revenue Next Year10.77%
Revenue Next 2Y7.14%
Revenue Next 3Y6.27%
Revenue Next 5Y6.74%
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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 25.63 indicates a quite expensive valuation of WTS.
Compared to the rest of the industry, the Price/Earnings ratio of WTS is on the same level as its industry peers.
Compared to an average S&P500 Price/Earnings ratio of 28.31, WTS is valued at the same level.
With a Price/Forward Earnings ratio of 24.58, 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 (20.48), we can say WTS is valued slightly more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.63 | ||
| Fwd PE | 24.58 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of WTS is on the same level as its industry peers.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of WTS is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.17 | ||
| EV/EBITDA | 17.5 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of WTS may justify a higher PE ratio.
PEG (NY)5.96
PEG (5Y)1.49
EPS Next 2Y5.46%
EPS Next 3Y6.32%
5. Dividend
5.1 Amount
With a yearly dividend of 0.81%, WTS is not a good candidate for dividend investing.
WTS's Dividend Yield is comparable with the industry average which is at 1.70.
With a Dividend Yield of 0.81, WTS pays less dividend than the S&P500 average, which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.81% |
5.2 History
The dividend of WTS is nicely growing with an annual growth rate of 10.94%!
WTS has been paying a dividend for at least 10 years, so it has 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)10.94%
Div Incr Years11
Div Non Decr Years19
5.3 Sustainability
WTS pays out 17.74% of its income as dividend. This is a sustainable payout ratio.
The dividend of WTS is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP17.74%
EPS Next 2Y5.46%
EPS Next 3Y6.32%
WATTS WATER TECHNOLOGIES-A
NYSE:WTS (5/10/2024, 10:40:00 AM)
211.98
+0.82 (+0.39%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap7.08B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.81% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.63 | ||
| Fwd PE | 24.58 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)5.96
PEG (5Y)1.49
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.35% | ||
| ROE | 17.32% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 17.33% | ||
| PM (TTM) | 12.75% | ||
| GM | 46.73% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.89
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.2 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 2.61 | ||
| Quick Ratio | 1.63 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)15.99%
EPS 3Y28.58%
EPS 5Y
EPS growth Q2Q
EPS Next Y4.3%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)3.88%
Revenue growth 3Y10.88%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y