Watts Water Technologies (NYSE:WTS) - Share price, News & Analysis

WTS fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	1/6
Past Performance	5/6
Financial Health	6/6
Dividends	4/6

WTS Stock Overview

Rewards

Trading at 31.9% below our estimate of its fair value

Earnings are forecast to grow 8.22% per year

Earnings grew by 44.1% over the past year

Risk Analysis

Significant insider selling over the past 3 months

Watts Water Technologies Competitors

Xylem

NYSE:XYL

US$14.8b

IDEX

NYSE:IEX

US$14.2b

Pentair

NYSE:PNR

US$8.1b

Evoqua Water Technologies

NYSE:AQUA

US$4.3b

Price History & Performance

Summary of all time highs, changes and price drops for Watts Water Technologies
Historical stock prices
Current Share Price	US$126.12
52 Week High	US$212.00
52 Week Low	US$122.47
Beta	0.98
1 Month Change	-6.43%
3 Month Change	-11.46%
1 Year Change	-4.87%
3 Year Change	54.69%
5 Year Change	104.24%
Change since IPO	559.45%

Recent News & Updates

May 12

Watts Water Technologies' (NYSE:WTS) Shareholders Will Receive A Bigger Dividend Than Last Year

Watts Water Technologies, Inc.'s ( NYSE:WTS ) dividend will be increasing to US$0.30 on 15th of June. Although the...

Apr 19

We Like These Underlying Return On Capital Trends At Watts Water Technologies (NYSE:WTS)

If you're not sure where to start when looking for the next multi-bagger, there are a few key trends you should keep an...

Shareholder Returns

	WTS	US Machinery	US Market
7D	-4.0%	-4.9%	-4.0%
1Y	-4.9%	-17.6%	-13.2%

Return vs Industry: WTS exceeded the US Machinery industry which returned -17.8% over the past year.

Return vs Market: WTS exceeded the US Market which returned -12.3% over the past year.

Price Volatility

Is WTS's price volatile compared to industry and market?
WTS volatility
WTS Average Weekly Movement	4.6%
Machinery Industry Average Movement	5.7%
Market Average Movement	7.8%
10% most volatile stocks in US Market	16.8%
10% least volatile stocks in US Market	2.9%

Stable Share Price: WTS is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: WTS's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1874	4,597	Bob Pagano	https://www.watts.com

Watts Water Technologies, Inc. designs, manufactures, and sells products, solution, and systems that manage and conserve the flow of fluids and energy into, through and out of buildings in the commercial and residential markets in the Americas, Europe, the Asia-Pacific, the Middle East, and Africa. The company offers residential and commercial flow control products, including backflow preventers, water pressure regulators, temperature and pressure relief valves, and thermostatic mixing valves. It also provides heating, ventilation, and air conditioning and gas products, such as boilers, water heaters, custom heat, and hot water solutions; hydronic and electric heating systems for under-floor radiant applications; custom heat and hot water solutions; hydronic pump groups for boiler manufacturers and alternative energy control packages; and flexible stainless steel connectors for natural and liquid propane gas in commercial food service and residential applications.

Watts Water Technologies Fundamentals Summary

How do Watts Water Technologies's earnings and revenue compare to its market cap?
WTS fundamental statistics
Market Cap	US$4.22b
Earnings (TTM)	US$178.50m
Revenue (TTM)	US$1.86b

23.6x

P/E Ratio

2.3x

P/S Ratio

Is WTS overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
WTS income statement (TTM)
Revenue	US$1.86b
Cost of Revenue	US$1.07b
Gross Profit	US$792.00m
Other Expenses	US$613.50m
Earnings	US$178.50m

Last Reported Earnings

Mar 27, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	5.34
Gross Margin	42.60%
Net Profit Margin	9.60%
Debt/Equity Ratio	17.4%

How did WTS perform over the long term?

See historical performance and comparison

Dividends

1.0%

Current Dividend Yield

20%

Payout Ratio

Does WTS pay a reliable dividends?

See WTS dividend history and benchmarks

When do you need to buy WTS by to receive an upcoming dividend?
Watts Water Technologies dividend dates
Ex Dividend Date	May 31 2022
Dividend Pay Date	Jun 15 2022
Days until Ex dividend	5 days
Days until Dividend pay date	20 days

Does WTS pay a reliable dividends?

See WTS dividend history and benchmarks

Valuation

Is Watts Water Technologies undervalued compared to its fair value and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

31.9%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: WTS ($126.12) is trading below our estimate of fair value ($185.25)

Significantly Below Fair Value: WTS is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: WTS is poor value based on its Price-To-Earnings Ratio (23.6x) compared to the US Machinery industry average (20.7x).

PE vs Market: WTS is poor value based on its Price-To-Earnings Ratio (23.6x) compared to the US market (15.1x).

Price to Earnings Growth Ratio

PEG Ratio: WTS is poor value based on its PEG Ratio (2.9x)

Price to Book Ratio

PB vs Industry: WTS is overvalued based on its Price-To-Book Ratio (3.6x) compared to the US Machinery industry average (2.2x).

Future Growth

How is Watts Water Technologies forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

8.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: WTS's forecast earnings growth (8.2% per year) is above the savings rate (1.9%).

Earnings vs Market: WTS's earnings (8.2% per year) are forecast to grow slower than the US market (12.3% per year).

High Growth Earnings: WTS's earnings are forecast to grow, but not significantly.

Revenue vs Market: WTS's revenue (3.5% per year) is forecast to grow slower than the US market (7.8% per year).

High Growth Revenue: WTS's revenue (3.5% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if WTS's Return on Equity is forecast to be high in 3 years time

Past Performance

How has Watts Water Technologies performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

13.2%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: WTS has high quality earnings.

Growing Profit Margin: WTS's current net profit margins (9.6%) are higher than last year (8.1%).

Past Earnings Growth Analysis

Earnings Trend: WTS's earnings have grown by 13.2% per year over the past 5 years.

Accelerating Growth: WTS's earnings growth over the past year (44.1%) exceeds its 5-year average (13.2% per year).

Earnings vs Industry: WTS earnings growth over the past year (44.1%) exceeded the Machinery industry 24%.

Return on Equity

High ROE: WTS's Return on Equity (15.4%) is considered low.

Financial Health

How is Watts Water Technologies's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: WTS's short term assets ($919.9M) exceed its short term liabilities ($404.8M).

Long Term Liabilities: WTS's short term assets ($919.9M) exceed its long term liabilities ($336.0M).

Debt to Equity History and Analysis

Debt Level: WTS has more cash than its total debt.

Reducing Debt: WTS's debt to equity ratio has reduced from 82.7% to 17.4% over the past 5 years.

Debt Coverage: WTS's debt is well covered by operating cash flow (71.7%).

Interest Coverage: WTS's interest payments on its debt are well covered by EBIT (48.5x coverage).

Balance Sheet

Dividend

What is Watts Water Technologies's current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

0.95%

Current Dividend Yield

Upcoming Dividend Payment

Dividend Yield vs Market

Notable Dividend: WTS's dividend (0.95%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.57%).

High Dividend: WTS's dividend (0.95%) is low compared to the top 25% of dividend payers in the US market (4.05%).

Stability and Growth of Payments

Stable Dividend: WTS's dividends per share have been stable in the past 10 years.

Growing Dividend: WTS's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (19.7%), WTS's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (34.2%), WTS's dividend payments are well covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

6.3yrs

Average management tenure

CEO

Bob Pagano (58 yo)

8yrs

Tenure

US$7,070,685

Compensation

Mr. Robert J. Pagano, Jr., also known as Bob, serves as the Chief Executive Officer and President of Watts Water Technologies, Inc. since May 27, 2014 and serves as its Chairman since February 07, 2022 and...

CEO Compensation Analysis

Compensation vs Market: Bob's total compensation ($USD7.07M) is about average for companies of similar size in the US market ($USD6.83M).

Compensation vs Earnings: Bob's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: WTS's management team is seasoned and experienced (6.3 years average tenure).

Board Members

Experienced Board: WTS's board of directors are considered experienced (7.5 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: WTS insiders have only sold shares in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/05/24 00:00
End of Day Share Price	2022/05/24 00:00
Earnings	2022/03/27
Annual Earnings	2021/12/31