ZURN ELKAY WATER SOLUTIONS C (ZWS) Stock Fundamental Analysis
NYSE:ZWS - New York Stock Exchange, Inc. - US98983L1089 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to ZWS. ZWS was compared to 41 industry peers in the Building Products industry. ZWS is in great health and has no worries on liquidiy or solvency at all, but the profibility rating is only average. ZWS is valied quite expensively at the moment, while it does show a decent growth rate.
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.
Each year in the past 5 years ZWS had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 6.50%, ZWS is in line with its industry, outperforming 46.34% of the companies in the same industry.
ZWS has a Return On Equity of 10.95%. This is comparable to the rest of the industry: ZWS outperforms 43.90% of its industry peers.
With a Return On Invested Capital value of 8.23%, ZWS is not doing good in the industry: 60.98% of the companies in the same industry are doing better.
Measured over the past 3 years, the Average Return On Invested Capital for ZWS is significantly below the industry average of 13.22%.
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
Looking at the Profit Margin, with a value of 10.72%, ZWS is in the better half of the industry, outperforming 65.85% of the companies in the same industry.
In the last couple of years the Profit Margin of ZWS has grown nicely.
ZWS has a Operating Margin of 16.67%. This is in the better half of the industry: ZWS outperforms 60.98% of its industry peers.
ZWS's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 45.39%, ZWS belongs to the top of the industry, outperforming 95.12% of the companies in the same industry.
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ZWS is destroying value.
Compared to 1 year ago, ZWS has less shares outstanding
The number of shares outstanding for ZWS has been increased compared to 5 years ago.
The debt/assets ratio for ZWS is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 3.79 indicates that ZWS is not in any danger for bankruptcy at the moment.
The Altman-Z score of ZWS (3.79) is better than 60.98% of its industry peers.
ZWS has a debt to FCF ratio of 1.91. This is a very positive value and a sign of high solvency as it would only need 1.91 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 1.91, ZWS is doing good in the industry, outperforming 75.61% of the companies in the same industry.
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 63.41% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.32 | ||
| Debt/FCF | 1.91 | ||
| Altman-Z | 3.79 |
ROIC/WACC0.81
WACC10.16%
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.
ZWS has a Current ratio of 2.87. This is in the better half of the industry: ZWS outperforms 78.05% of its industry peers.
ZWS has a Quick Ratio of 1.72. This is a normal value and indicates that ZWS is financially healthy and should not expect problems in meeting its short term obligations.
ZWS has a Quick ratio of 1.72. This is in the better half of the industry: ZWS outperforms 70.73% 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.
The Earnings Per Share has been growing by 58.83% on average over the past years. This is a very strong growth
Looking at the last year, ZWS shows a small growth in Revenue. The Revenue has grown by 3.22% in the last year.
ZWS shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -5.25% yearly.
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
ZWS is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.17% yearly.
ZWS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.54% yearly.
EPS Next Y4.65%
EPS Next 2Y7.65%
EPS Next 3Y7.57%
EPS Next 5Y9.17%
Revenue Next Year3.42%
Revenue Next 2Y4.34%
Revenue Next 3Y3.61%
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
The Price/Earnings ratio is 26.48, which means the current valuation is very expensive for ZWS.
Compared to the rest of the industry, the Price/Earnings ratio of ZWS indicates a slightly more expensive valuation: ZWS is more expensive than 68.29% of the companies listed in the same industry.
ZWS is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.75, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 23.21, ZWS is valued on the expensive side.
Based on the Price/Forward Earnings ratio, ZWS is valued a bit more expensive than the industry average as 65.85% of the companies are valued more cheaply.
ZWS is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 20.49, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.48 | ||
| Fwd PE | 23.21 |
4.2 Price Multiples
65.85% of the companies in the same industry are cheaper than ZWS, based on the Enterprise Value to EBITDA ratio.
ZWS's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.34 | ||
| EV/EBITDA | 17.45 |
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)5.7
PEG (5Y)0.45
EPS Next 2Y7.65%
EPS Next 3Y7.57%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.05%, ZWS has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 1.23, ZWS pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.44, ZWS's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.05% |
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 2Y7.65%
EPS Next 3Y7.57%
34.43
+0.47 (+1.38%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners85.99%
Inst Owner Change0.19%
Ins Owners2.27%
Ins Owner Change-44.35%
Market Cap5.81B
Analysts73.33
Price Target35.99 (4.53%)
Short Float %4.29%
Short Ratio5.52
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.05% |
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)-13.03%
PT rev (3m)-10.51%
EPS NQ rev (1m)0.39%
EPS NQ rev (3m)-0.1%
EPS NY rev (1m)-1.21%
EPS NY rev (3m)-1.21%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.12%
Revenue NY rev (1m)-0.18%
Revenue NY rev (3m)-0.24%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.48 | ||
| Fwd PE | 23.21 | ||
| P/S | 3.67 | ||
| P/FCF | 22.34 | ||
| P/OCF | 20.57 | ||
| P/B | 3.75 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.45 |
EPS(TTM)1.3
EY3.78%
EPS(NY)1.48
Fwd EY4.31%
FCF(TTM)1.54
FCFY4.48%
OCF(TTM)1.67
OCFY4.86%
SpS9.37
BVpS9.17
TBVpS-0.73
PEG (NY)5.7
PEG (5Y)0.45
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 | 3.79 |
F-Score7
WACC10.16%
ROIC/WACC0.81
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 Y4.65%
EPS Next 2Y7.65%
EPS Next 3Y7.57%
EPS Next 5Y9.17%
Revenue 1Y (TTM)3.22%
Revenue growth 3Y19.81%
Revenue growth 5Y-5.25%
Sales Q2Q%4.01%
Revenue Next Year3.42%
Revenue Next 2Y4.34%
Revenue Next 3Y3.61%
Revenue Next 5Y4.54%
EBIT growth 1Y13.66%
EBIT growth 3Y32.6%
EBIT growth 5Y-4.07%
EBIT Next Year39.81%
EBIT Next 3Y17.19%
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%