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 6 out of 10 in our fundamental rating. WTS was compared to 127 industry peers in the Machinery industry. Both the health and profitability get an excellent rating, making WTS a very profitable company, without any liquidiy or solvency issues. WTS does not seem to be growing, but still is valued expensively.
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 (11.70%) is better than 85.83% of its industry peers.
WTS has a better Return On Equity (16.52%) than 74.80% of its industry peers.
Looking at the Return On Invested Capital, with a value of 14.84%, WTS belongs to the top of the industry, outperforming 85.83% of the companies in the same industry.
WTS had an Average Return On Invested Capital over the past 3 years of 14.98%. This is above the industry average of 10.78%.
| 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
The Profit Margin of WTS (13.07%) is better than 82.68% of its industry peers.
In the last couple of years the Profit Margin of WTS has grown nicely.
Looking at the Operating Margin, with a value of 18.07%, WTS belongs to the top of the industry, outperforming 83.46% of the companies in the same industry.
In the last couple of years the Operating Margin of WTS has grown nicely.
WTS's Gross Margin of 47.65% is amongst the best of the industry. WTS outperforms 88.19% 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.
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.
The debt/assets ratio for WTS has been reduced compared to a year ago.
2.2 Solvency
WTS has an Altman-Z score of 9.43. This indicates that WTS is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of WTS (9.43) is better than 92.91% 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 better Debt to FCF ratio (0.59) than 90.55% of its industry peers.
A Debt/Equity ratio of 0.11 indicates that WTS is not too dependend on debt financing.
WTS's Debt to Equity ratio of 0.11 is fine compared to the rest of the industry. WTS outperforms 76.38% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.11 | ||
| Debt/FCF | 0.59 | ||
| Altman-Z | 9.43 |
ROIC/WACC1.5
WACC9.86%
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 64.57% of the companies in the same industry.
A Quick Ratio of 1.53 indicates that WTS should not have too much problems paying its short term obligations.
WTS has a better Quick ratio (1.53) than 66.14% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.46 | ||
| Quick Ratio | 1.53 |
3. Growth
3.1 Past
WTS shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 2.65%.
Measured over the past years, WTS shows a quite strong growth in Earnings Per Share. The EPS has been growing by 16.86% on average per year.
The Revenue has been growing slightly by 3.89% in the past 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
Based on estimates for the next years, WTS will show a small growth in Earnings Per Share. The EPS will grow by 7.00% on average per year.
WTS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.69% yearly.
EPS Next Y6.47%
EPS Next 2Y6.69%
EPS Next 3Y6.39%
EPS Next 5Y7%
Revenue Next Year1.94%
Revenue Next 2Y2.82%
Revenue Next 3Y2.95%
Revenue Next 5Y3.69%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
WTS is valuated quite expensively with a Price/Earnings ratio of 28.58.
Compared to the rest of the industry, the Price/Earnings ratio of WTS is on the same level as its industry peers.
WTS is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.41, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 25.22, which means the current valuation is very expensive for WTS.
Compared to the rest of the industry, the Price/Forward Earnings ratio of WTS indicates a slightly more expensive valuation: WTS is more expensive than 60.63% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 35.19. WTS is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.58 | ||
| Fwd PE | 25.22 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as WTS.
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 | 25.3 | ||
| EV/EBITDA | 18.2 |
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.
The excellent profitability rating of WTS may justify a higher PE ratio.
PEG (NY)4.42
PEG (5Y)1.7
EPS Next 2Y6.69%
EPS Next 3Y6.39%
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 1.82.
With a Dividend Yield of 0.81, WTS pays less dividend than the S&P500 average, which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.81% |
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
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%
254.64
-3.52 (-1.36%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners99.18%
Inst Owner Change0%
Ins Owners1.04%
Ins Owner Change3.95%
Market Cap8.50B
Analysts69.23
Price Target238.48 (-6.35%)
Short Float %3.21%
Short Ratio4.33
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.81% |
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)1.3%
PT rev (3m)6.92%
EPS NQ rev (1m)0.81%
EPS NQ rev (3m)4.75%
EPS NY rev (1m)0.77%
EPS NY rev (3m)2.33%
Revenue NQ rev (1m)0.6%
Revenue NQ rev (3m)2.67%
Revenue NY rev (1m)0.43%
Revenue NY rev (3m)1.4%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.58 | ||
| Fwd PE | 25.22 | ||
| P/S | 3.8 | ||
| P/FCF | 25.3 | ||
| P/OCF | 22.93 | ||
| P/B | 4.8 | ||
| P/tB | 11.18 | ||
| EV/EBITDA | 18.2 |
EPS(TTM)8.91
EY3.5%
EPS(NY)10.1
Fwd EY3.97%
FCF(TTM)10.06
FCFY3.95%
OCF(TTM)11.11
OCFY4.36%
SpS67.09
BVpS53.09
TBVpS22.77
PEG (NY)4.42
PEG (5Y)1.7
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 | 9.43 |
F-Score7
WACC9.86%
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)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 Year1.94%
Revenue Next 2Y2.82%
Revenue Next 3Y2.95%
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%