ZURN ELKAY WATER SOLUTIONS C (ZWS) Stock Fundamental Analysis
NYSE:ZWS - New York Stock Exchange, Inc. - US98983L1089 - Common Stock - Currency: USD
Overall ZWS gets a fundamental rating of 5 out of 10. We evaluated ZWS against 42 industry peers in the Building Products industry. While ZWS belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. While showing a medium growth rate, ZWS is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
ZWS had positive earnings in the past year.
ZWS had a positive operating cash flow in the past year.
ZWS had positive earnings in each of the past 5 years.
ZWS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ZWS has a Return On Assets of 6.50%. This is comparable to the rest of the industry: ZWS outperforms 50.00% of its industry peers.
ZWS's Return On Equity of 10.95% is in line compared to the rest of the industry. ZWS outperforms 50.00% of its industry peers.
The Return On Invested Capital of ZWS (8.23%) is comparable to the rest of the industry.
ZWS had an Average Return On Invested Capital over the past 3 years of 6.01%. This is significantly below the industry average of 12.70%.
The 3 year average ROIC (6.01%) for ZWS is below the current ROIC(8.23%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.5% | ||
| ROE | 10.95% | ||
| ROIC | 8.23% |
ROA(3y)4.14%
ROA(5y)5.64%
ROE(3y)6.98%
ROE(5y)25.85%
ROIC(3y)6.01%
ROIC(5y)7.19%
1.3 Margins
The Profit Margin of ZWS (10.72%) is better than 64.29% of its industry peers.
In the last couple of years the Profit Margin of ZWS has grown nicely.
ZWS's Operating Margin of 16.67% is fine compared to the rest of the industry. ZWS outperforms 64.29% of its industry peers.
ZWS's Operating Margin has been stable in the last couple of years.
The Gross Margin of ZWS (45.39%) is better than 95.24% of its industry peers.
ZWS's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.67% | ||
| PM (TTM) | 10.72% | ||
| GM | 45.39% |
OM growth 3Y10.68%
OM growth 5Y1.24%
PM growth 3Y-8.32%
PM growth 5Y80%
GM growth 3Y3.28%
GM growth 5Y3.36%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ZWS is destroying value.
Compared to 1 year ago, ZWS has less shares outstanding
Compared to 5 years ago, ZWS has more shares outstanding
The debt/assets ratio for ZWS is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 3.96 indicates that ZWS is not in any danger for bankruptcy at the moment.
With a Altman-Z score value of 3.96, ZWS perfoms like the industry average, outperforming 54.76% of the companies in the same industry.
The Debt to FCF ratio of ZWS is 1.91, which is an excellent value as it means it would take ZWS, only 1.91 years of fcf income to pay off all of its debts.
ZWS's Debt to FCF ratio of 1.91 is fine compared to the rest of the industry. ZWS outperforms 76.19% of its industry peers.
A Debt/Equity ratio of 0.32 indicates that ZWS is not too dependend on debt financing.
ZWS has a better Debt to Equity ratio (0.32) than 64.29% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.32 | ||
| Debt/FCF | 1.91 | ||
| Altman-Z | 3.96 |
ROIC/WACC0.84
WACC9.76%
2.3 Liquidity
ZWS has a Current Ratio of 2.87. This indicates that ZWS is financially healthy and has no problem in meeting its short term obligations.
With a decent Current ratio value of 2.87, ZWS is doing good in the industry, outperforming 78.57% of the companies in the same industry.
A Quick Ratio of 1.72 indicates that ZWS should not have too much problems paying its short term obligations.
The Quick ratio of ZWS (1.72) is better than 73.81% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.87 | ||
| Quick Ratio | 1.72 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 20.37% over the past year.
Measured over the past years, ZWS shows a very strong growth in Earnings Per Share. The EPS has been growing by 58.83% on average per year.
The Revenue has been growing slightly by 3.22% in the past year.
Measured over the past years, ZWS shows a decrease in Revenue. The Revenue has been decreasing by -5.25% on average per year.
EPS 1Y (TTM)20.37%
EPS 3Y-11.07%
EPS 5Y58.83%
EPS Q2Q%6.9%
Revenue 1Y (TTM)3.22%
Revenue growth 3Y19.81%
Revenue growth 5Y-5.25%
Sales Q2Q%4.01%
3.2 Future
The Earnings Per Share is expected to grow by 9.17% on average over the next years. This is quite good.
ZWS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.54% yearly.
EPS Next Y5.83%
EPS Next 2Y7.7%
EPS Next 3Y8.14%
EPS Next 5Y9.17%
Revenue Next Year3.55%
Revenue Next 2Y4.13%
Revenue Next 3Y4.21%
Revenue Next 5Y4.54%
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 accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
ZWS is valuated quite expensively with a Price/Earnings ratio of 28.09.
Based on the Price/Earnings ratio, ZWS is valued a bit more expensive than the industry average as 66.67% of the companies are valued more cheaply.
The average S&P500 Price/Earnings ratio is at 26.52. ZWS is around the same levels.
Based on the Price/Forward Earnings ratio of 24.60, the valuation of ZWS can be described as rather expensive.
66.67% of the companies in the same industry are cheaper than ZWS, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.25, ZWS is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.09 | ||
| Fwd PE | 24.6 |
4.2 Price Multiples
ZWS's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. ZWS is more expensive than 66.67% of the companies in the same industry.
ZWS's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.62 | ||
| EV/EBITDA | 18.27 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ZWS does not grow enough to justify the current Price/Earnings ratio.
ZWS has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)4.82
PEG (5Y)0.48
EPS Next 2Y7.7%
EPS Next 3Y8.14%
5. Dividend
5.1 Amount
ZWS has a yearly dividend return of 0.99%, which is pretty low.
ZWS's Dividend Yield is a higher than the industry average which is at 1.21.
Compared to an average S&P500 Dividend Yield of 2.38, ZWS's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.99% |
5.2 History
On average, the dividend of ZWS grows each year by 8.28%, which is quite nice.
ZWS has been paying a dividend for over 5 years, so it has already some track record.
ZWS has decreased its dividend recently.
Dividend Growth(5Y)8.28%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
ZWS pays out 34.16% of its income as dividend. This is a sustainable payout ratio.
The dividend of ZWS is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP34.16%
EPS Next 2Y7.7%
EPS Next 3Y8.14%
36.52
+0.26 (+0.72%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners85.99%
Inst Owner Change9.36%
Ins Owners2.27%
Ins Owner Change-45.09%
Market Cap6.14B
Analysts75
Price Target36.87 (0.96%)
Short Float %3.49%
Short Ratio5.03
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.99% |
Yearly Dividend0.33
Dividend Growth(5Y)8.28%
DP34.16%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)9.79%
Min EPS beat(2)5.84%
Max EPS beat(2)13.74%
EPS beat(4)4
Avg EPS beat(4)7.07%
Min EPS beat(4)3.96%
Max EPS beat(4)13.74%
EPS beat(8)8
Avg EPS beat(8)7.89%
EPS beat(12)11
Avg EPS beat(12)7.49%
EPS beat(16)15
Avg EPS beat(16)21.77%
Revenue beat(2)2
Avg Revenue beat(2)0.24%
Min Revenue beat(2)0.17%
Max Revenue beat(2)0.3%
Revenue beat(4)3
Avg Revenue beat(4)0.05%
Min Revenue beat(4)-0.29%
Max Revenue beat(4)0.3%
Revenue beat(8)6
Avg Revenue beat(8)0.31%
Revenue beat(12)8
Avg Revenue beat(12)0.47%
Revenue beat(16)9
Avg Revenue beat(16)-5.77%
PT rev (1m)2.43%
PT rev (3m)-10.92%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.56%
EPS NY rev (1m)1.13%
EPS NY rev (3m)-0.09%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.17%
Revenue NY rev (1m)0.12%
Revenue NY rev (3m)-0.06%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.09 | ||
| Fwd PE | 24.6 | ||
| P/S | 3.89 | ||
| P/FCF | 23.62 | ||
| P/OCF | 21.75 | ||
| P/B | 3.97 | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.27 |
EPS(TTM)1.3
EY3.56%
EPS(NY)1.48
Fwd EY4.07%
FCF(TTM)1.55
FCFY4.23%
OCF(TTM)1.68
OCFY4.6%
SpS9.4
BVpS9.2
TBVpS-0.73
PEG (NY)4.82
PEG (5Y)0.48
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.5% | ||
| ROE | 10.95% | ||
| ROCE | 11.15% | ||
| ROIC | 8.23% | ||
| ROICexc | 8.77% | ||
| ROICexgc | 35.46% | ||
| OM | 16.67% | ||
| PM (TTM) | 10.72% | ||
| GM | 45.39% | ||
| FCFM | 16.45% |
ROA(3y)4.14%
ROA(5y)5.64%
ROE(3y)6.98%
ROE(5y)25.85%
ROIC(3y)6.01%
ROIC(5y)7.19%
ROICexc(3y)6.44%
ROICexc(5y)8.06%
ROICexgc(3y)26.42%
ROICexgc(5y)27.95%
ROCE(3y)8.14%
ROCE(5y)9.74%
ROICexcg growth 3Y11.52%
ROICexcg growth 5Y3.59%
ROICexc growth 3Y-7.79%
ROICexc growth 5Y-1.06%
OM growth 3Y10.68%
OM growth 5Y1.24%
PM growth 3Y-8.32%
PM growth 5Y80%
GM growth 3Y3.28%
GM growth 5Y3.36%
F-Score7
Asset Turnover0.61
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.32 | ||
| Debt/FCF | 1.91 | ||
| Debt/EBITDA | 1.4 | ||
| Cap/Depr | 25.06% | ||
| Cap/Sales | 1.42% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 80.01% | ||
| Profit Quality | 153.45% | ||
| Current Ratio | 2.87 | ||
| Quick Ratio | 1.72 | ||
| Altman-Z | 3.96 |
F-Score7
WACC9.76%
ROIC/WACC0.84
Cap/Depr(3y)20.96%
Cap/Depr(5y)28.15%
Cap/Sales(3y)1.13%
Cap/Sales(5y)1.59%
Profit Quality(3y)173.63%
Profit Quality(5y)168.36%
High Growth Momentum
Growth
EPS 1Y (TTM)20.37%
EPS 3Y-11.07%
EPS 5Y58.83%
EPS Q2Q%6.9%
EPS Next Y5.83%
EPS Next 2Y7.7%
EPS Next 3Y8.14%
EPS Next 5Y9.17%
Revenue 1Y (TTM)3.22%
Revenue growth 3Y19.81%
Revenue growth 5Y-5.25%
Sales Q2Q%4.01%
Revenue Next Year3.55%
Revenue Next 2Y4.13%
Revenue Next 3Y4.21%
Revenue Next 5Y4.54%
EBIT growth 1Y13.66%
EBIT growth 3Y32.6%
EBIT growth 5Y-4.07%
EBIT Next Year41.5%
EBIT Next 3Y17.38%
EBIT Next 5Y15.62%
FCF growth 1Y80.75%
FCF growth 3Y10.7%
FCF growth 5Y4.97%
OCF growth 1Y81.21%
OCF growth 3Y9.49%
OCF growth 5Y2.6%