ZURN ELKAY WATER SOLUTIONS C (ZWS) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ZWS - US98983L1089 - Common Stock
46.75 USD
-0.05 (-0.11%)
We assign a fundamental rating of 6 out of 10 to ZWS. ZWS was compared to 42 industry peers in the Building Products industry. Both the health and profitability get an excellent rating, making ZWS a very profitable company, without any liquidiy or solvency issues. ZWS is quite expensive at the moment. It does show a decent growth rate. With these ratings, ZWS could be worth investigating further for quality investing!.
1. Profitability
1.1 Basic Checks
- ZWS had positive earnings in the past year.
- In the past year ZWS had a positive cash flow from operations.
- 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
- The Return On Assets of ZWS (7.16%) is comparable to the rest of the industry.
- With a Return On Equity value of 12.08%, ZWS perfoms like the industry average, outperforming 52.38% of the companies in the same industry.
- ZWS has a Return On Invested Capital of 8.54%. This is comparable to the rest of the industry: ZWS outperforms 50.00% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for ZWS is significantly below the industry average of 12.68%.
- The 3 year average ROIC (6.01%) for ZWS is below the current ROIC(8.54%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.16% | ||
| ROE | 12.08% | ||
| ROIC | 8.54% |
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
- With a decent Profit Margin value of 11.59%, ZWS is doing good in the industry, outperforming 64.29% of the companies in the same industry.
- In the last couple of years the Profit Margin of ZWS has grown nicely.
- ZWS's Operating Margin of 16.69% is fine compared to the rest of the industry. ZWS outperforms 66.67% of its industry peers.
- In the last couple of years the Operating Margin of ZWS has remained more or less at the same level.
- Looking at the Gross Margin, with a value of 44.91%, ZWS belongs to the top of the industry, outperforming 90.48% of the companies in the same industry.
- In the last couple of years the Gross Margin of ZWS has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.69% | ||
| PM (TTM) | 11.59% | ||
| GM | 44.91% |
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.
- The number of shares outstanding for ZWS has been reduced compared to 1 year ago.
- ZWS has more shares outstanding than it did 5 years ago.
- Compared to 1 year ago, ZWS has a worse debt to assets ratio.
2.2 Solvency
- ZWS has an Altman-Z score of 4.89. This indicates that ZWS is financially healthy and has little risk of bankruptcy at the moment.
- ZWS's Altman-Z score of 4.89 is fine compared to the rest of the industry. ZWS outperforms 61.90% of its industry peers.
- The Debt to FCF ratio of ZWS is 1.72, which is an excellent value as it means it would take ZWS, only 1.72 years of fcf income to pay off all of its debts.
- ZWS has a better Debt to FCF ratio (1.72) than 78.57% of its industry peers.
- A Debt/Equity ratio of 0.31 indicates that ZWS is not too dependend on debt financing.
- ZWS's Debt to Equity ratio of 0.31 is fine compared to the rest of the industry. ZWS outperforms 66.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.31 | ||
| Debt/FCF | 1.72 | ||
| Altman-Z | 4.89 |
ROIC/WACC0.94
WACC9.12%
2.3 Liquidity
- A Current Ratio of 2.78 indicates that ZWS has no problem at all paying its short term obligations.
- ZWS has a Current ratio of 2.78. This is in the better half of the industry: ZWS outperforms 71.43% of its industry peers.
- ZWS has a Quick Ratio of 1.83. This is a normal value and indicates that ZWS is financially healthy and should not expect problems in meeting its short term obligations.
- With a decent Quick ratio value of 1.83, ZWS is doing good in the industry, outperforming 76.19% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.78 | ||
| Quick Ratio | 1.83 |
3. Growth
3.1 Past
- ZWS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 21.31%, which is quite impressive.
- 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 6.88% in the past year.
- ZWS shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -5.25% yearly.
EPS 1Y (TTM)21.31%
EPS 3Y-11.07%
EPS 5Y58.83%
EPS Q2Q%26.47%
Revenue 1Y (TTM)6.88%
Revenue growth 3Y19.81%
Revenue growth 5Y-5.25%
Sales Q2Q%11.07%
3.2 Future
- Based on estimates for the next years, ZWS will show a quite strong growth in Earnings Per Share. The EPS will grow by 12.36% on average per year.
- The Revenue is expected to grow by 6.26% on average over the next years.
EPS Next Y18.68%
EPS Next 2Y14.33%
EPS Next 3Y12.61%
EPS Next 5Y12.36%
Revenue Next Year8.17%
Revenue Next 2Y6.86%
Revenue Next 3Y6.22%
Revenue Next 5Y6.26%
3.3 Evolution
- Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past 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
- A Price/Earnings ratio of 31.59 indicates a quite expensive valuation of ZWS.
- Based on the Price/Earnings ratio, ZWS is valued a bit more expensive than 71.43% of the companies in the same industry.
- ZWS's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.21.
- A Price/Forward Earnings ratio of 27.94 indicates a quite expensive valuation of ZWS.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of ZWS indicates a slightly more expensive valuation: ZWS is more expensive than 71.43% of the companies listed in the same industry.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.98, ZWS is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.59 | ||
| Fwd PE | 27.94 |
4.2 Price Multiples
- 76.19% of the companies in the same industry are cheaper than ZWS, based on the Enterprise Value to EBITDA ratio.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of ZWS is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.11 | ||
| EV/EBITDA | 22 |
4.3 Compensation for Growth
- The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- The decent profitability rating of ZWS may justify a higher PE ratio.
- A more expensive valuation may be justified as ZWS's earnings are expected to grow with 12.61% in the coming years.
PEG (NY)1.69
PEG (5Y)0.54
EPS Next 2Y14.33%
EPS Next 3Y12.61%
5. Dividend
5.1 Amount
- With a yearly dividend of 0.94%, ZWS is not a good candidate for dividend investing.
- ZWS's Dividend Yield is a higher than the industry average which is at 0.66.
- Compared to an average S&P500 Dividend Yield of 1.81, ZWS's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.94% |
5.2 History
- The dividend of ZWS is nicely growing with an annual growth rate of 8.28%!
- 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
- 31.57% of the earnings are spent on dividend by ZWS. This is a low number and sustainable payout ratio.
- ZWS's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP31.57%
EPS Next 2Y14.33%
EPS Next 3Y12.61%
ZURN ELKAY WATER SOLUTIONS C / ZWS FAQ
What is the fundamental rating for ZWS stock?
ChartMill assigns a fundamental rating of 6 / 10 to ZWS.
What is the valuation status for ZWS stock?
ChartMill assigns a valuation rating of 2 / 10 to ZURN ELKAY WATER SOLUTIONS C (ZWS). This can be considered as Overvalued.
Can you provide the profitability details for ZURN ELKAY WATER SOLUTIONS C?
ZURN ELKAY WATER SOLUTIONS C (ZWS) has a profitability rating of 7 / 10.
What is the financial health of ZURN ELKAY WATER SOLUTIONS C (ZWS) stock?
The financial health rating of ZURN ELKAY WATER SOLUTIONS C (ZWS) is 7 / 10.
What is the earnings growth outlook for ZURN ELKAY WATER SOLUTIONS C?
The Earnings per Share (EPS) of ZURN ELKAY WATER SOLUTIONS C (ZWS) is expected to grow by 18.68% in the next year.