NYSE:WTS

Stock Analysis Report

Watts Water Technologies

Executive Summary

Watts Water Technologies, Inc. designs, manufactures, and sells products and systems that manage and conserve the flow of fluids and energy into, through and out of buildings in the residential and commercial markets.

Snowflake

Fundamentals

Solid track record with excellent balance sheet and pays a dividend.


Similar Companies

Share Price & News

How has Watts Water Technologies's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

0.9%

WTS

3.3%

US Machinery

0.07%

US Market


1 Year Return

30.5%

WTS

15.1%

US Machinery

8.9%

US Market

Return vs Industry: WTS exceeded the US Machinery industry which returned 15.1% over the past year.

Return vs Market: WTS exceeded the US Market which returned 8.9% over the past year.


Shareholder returns

WTSIndustryMarket
7 Day0.9%3.3%0.07%
30 Day-3.8%3.5%-0.3%
90 Day-2.4%-0.5%-1.6%
1 Year31.9%30.5%17.5%15.1%11.3%8.9%
3 Year53.3%48.3%55.1%45.1%46.3%36.8%
5 Year55.8%47.3%56.6%37.5%62.1%44.3%

Price Volatility Vs. Market

How volatile is Watts Water Technologies's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

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

3.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: WTS ($91.22) is trading below our estimate of fair value ($94.6)

Significantly Below Fair Value: WTS is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: WTS is poor value based on its PE Ratio (23.7x) compared to the Machinery industry average (20.6x).

PE vs Market: WTS is poor value based on its PE Ratio (23.7x) compared to the US market (17.8x).


Price to Earnings Growth Ratio

PEG Ratio: WTS is poor value based on its PEG Ratio (3.4x)


Price to Book Ratio

PB vs Industry: WTS is overvalued based on its PB Ratio (3.3x) compared to the US Machinery industry average (2.3x).


Next Steps

Future Growth

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

7.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: WTS's forecast earnings growth (7% per year) is above the savings rate (2.7%).

Earnings vs Market: WTS's earnings (7% per year) are forecast to grow slower than the US market (14.5% per year).

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

Revenue vs Market: WTS's revenue (2.9% per year) is forecast to grow slower than the US market (7.2% per year).

High Growth Revenue: WTS's revenue (2.9% 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


Next Steps

Past Performance

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

29.9%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: WTS's earnings have grown significantly by 29.9% per year over the past 5 years.

Accelerating Growth: WTS's earnings growth over the past year (48.6%) exceeds its 5-year average (29.9% per year).

Earnings vs Industry: WTS earnings growth over the past year (48.6%) exceeded the Machinery industry 16.7%.


Return on Equity

High ROE: WTS's Return on Equity (14%) is considered low.


Return on Assets

ROA vs Industry: WTS has a higher Return on Assets than the Machinery industry average last year.


Return on Capital Employed

ROCE Improving: WTS has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Watts Water Technologies's financial position?


Financial Position Analysis

Short Term Liabilities: WTS's short term assets ($728.4M) exceeds its short term liabilities ($391.6M)

Long Term Liabilities: WTS's short term assets (728.4M) exceeds its long term liabilities (352.6M)


Debt to Equity History and Analysis

Debt Level: WTS's debt to equity ratio (36.8%) is considered satisfactory

Reducing Debt: WTS's debt to equity ratio has increased from 30.4% to 36.8% over the past 5 years.

Debt Coverage: WTS's debt is well covered by operating cash flow (54.6%).

Interest Coverage: WTS's interest payments on its debt are well covered by EBIT (13.8x coverage).


Balance Sheet

Inventory Level: WTS has a high level of physical assets or inventory.

Debt Coverage by Assets: WTS's debt is covered by short term assets (assets are 2.118670x debt).


Next Steps

Dividend

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

1.01%

Current Dividend Yield


Dividend Yield vs Market

company1.0%marketbottom25%1.4%markettop25%3.7%industryaverage2.0%forecastin3Years1.0%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: WTS's dividend (1.01%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.45%).

High Dividend: WTS's dividend (1.01%) is low compared to the top 25% of dividend payers in the US market (3.68%).

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.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (22.4%), WTS's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: WTS's dividends in 3 years are forecast to be well covered by earnings (18.3% payout ratio).


Next Steps

Management

What is the CEO of Watts Water Technologies's salary, the management and board of directors tenure and is there insider trading?

3.7yrs

Average management tenure


CEO

Bob Pagano (56yo)

5.4yrs

Tenure

US$5,854,532

Compensation

Mr. Robert J. Pagano, Jr., also known as Bob, has been the Chief Executive Officer and President of Watts Water Technologies, Inc. since May 27, 2014 and was its Interim Chief Financial Officer from April  ...


CEO Compensation Analysis

Compensation vs. Market: Bob's total compensation ($USD5.85M) is about average for companies of similar size in the US market ($USD5.11M).

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


Management Age and Tenure

3.7yrs

Average Tenure

54yo

Average Age

Experienced Management: WTS's management team is considered experienced (3.7 years average tenure).


Board Age and Tenure

4.3yrs

Average Tenure

60yo

Average Age

Experienced Board: WTS's board of directors are considered experienced (4.3 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$5,894,85824 May 19
GAMCO Investors, Inc.
EntityCompany
Shares85,080
Max PriceUS$86.45
SellUS$992,19614 Mar 19
Timothy Horne
EntityIndividual
Role
Director Emeritus
Director Emeritus
Shares12,500
Max PriceUS$79.57
SellUS$1,072,00912 Mar 19
Timothy Horne
EntityIndividual
Role
Director Emeritus
Director Emeritus
Shares13,481
Max PriceUS$79.52
SellUS$1,866,48306 Mar 19
Timothy Horne
EntityIndividual
Role
Director Emeritus
Director Emeritus
Shares23,043
Max PriceUS$81.00
SellUS$216,55305 Mar 19
Elie Melhem
EntityIndividual
Role
Unit President
President of Asia-Pacific
Shares2,681
Max PriceUS$80.88
SellUS$79,05604 Mar 19
Timothy Horne
EntityIndividual
Role
Director Emeritus
Director Emeritus
Shares976
Max PriceUS$81.00
SellUS$789,12327 Feb 19
Kenneth Lepage
EntityIndividual
Role
Chief Legal Officer
Executive VP
Shares9,673
Max PriceUS$81.58
SellUS$877,23214 Feb 19
Munish Nanda
EntityIndividual
Role
Unit President
President of Americas & Europe
Shares11,059
Max PriceUS$79.36
SellUS$82,03911 Dec 18
Elie Melhem
EntityIndividual
Role
Unit President
President of Asia-Pacific
Shares1,173
Max PriceUS$69.94
SellUS$74,42414 Nov 18
Elie Melhem
EntityIndividual
Role
Unit President
President of Asia-Pacific
Shares1,000
Max PriceUS$74.53
SellUS$201,62808 Nov 18
Joseph Noonan
EntityIndividual
Role
Member of the Board of Directors
Director
Shares2,653
Max PriceUS$76.00

Ownership Breakdown


Management Team

  • Kenneth Lepage (48yo)

    Executive VP

    • Tenure: 11.2yrs
    • Compensation: US$1.58m
  • Bob Pagano (56yo)

    CEO, President & Director

    • Tenure: 5.4yrs
    • Compensation: US$5.85m
  • Tim MacPhee

    VP of Investor Relations & Treasurer

    • Tenure: 0yrs
  • Ram Ramakrishnan

    Executive Vice President of Strategy & Business Development

    • Tenure: 6yrs
  • Elie Melhem (56yo)

    President of Asia-Pacific

    • Tenure: 3.7yrs
    • Compensation: US$1.50m
  • Munish Nanda (54yo)

    President of Americas & Europe

    • Tenure: 3.7yrs
    • Compensation: US$2.38m
  • Shashank Patel (58yo)

    Chief Financial Officer

    • Tenure: 1.3yrs
    • Compensation: US$2.08m
  • Virginia Halloran (39yo)

    Chief Accounting Officer

    • Tenure: 3.8yrs
  • Jenn Congdon (49yo)

    Chief Human Resources Officer

    • Tenure: 2.8yrs

Board Members

  • Louise Goeser (66yo)

    Director

    • Tenure: 1.6yrs
    • Compensation: US$196.24k
  • Merilee Raines (63yo)

    Director

    • Tenure: 8.7yrs
    • Compensation: US$203.90k
  • W. Kissel (68yo)

    Chairman of the Board

    • Tenure: 0yrs
    • Compensation: US$247.03k
  • Timothy Horne (81yo)

    Director Emeritus

    • Tenure: 9.4yrs
    • Compensation: US$722.22k
  • Bob Pagano (56yo)

    CEO, President & Director

    • Tenure: 5.4yrs
    • Compensation: US$5.85m
  • Chris Conway (64yo)

    Director

    • Tenure: 4.3yrs
    • Compensation: US$198.90k
  • David Dunbar (57yo)

    Director

    • Tenure: 2.7yrs
    • Compensation: US$183.90k
  • Joe Reitmeier (54yo)

    Director

    • Tenure: 3.7yrs
    • Compensation: US$183.90k
  • Joseph Noonan (37yo)

    Director

    • Tenure: 6.4yrs
    • Compensation: US$183.90k
  • Jes Hansen (51yo)

    Director

    • Tenure: 2.7yrs
    • Compensation: US$183.90k

Company Information

Watts Water Technologies, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Watts Water Technologies, Inc.
  • Ticker: WTS
  • Exchange: NYSE
  • Founded: 1874
  • Industry: Industrial Machinery
  • Sector: Capital Goods
  • Market Cap: US$3.094b
  • Shares outstanding: 33.92m
  • Website: https://www.watts.com

Number of Employees


Location

  • Watts Water Technologies, Inc.
  • 815 Chestnut Street
  • North Andover
  • Massachusetts
  • 1845
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
WTSNYSE (New York Stock Exchange)YesClass A Common StockUSUSDAug 1986
W3WDB (Deutsche Boerse AG)YesClass A Common StockDEEURAug 1986

Biography

Watts Water Technologies, Inc. designs, manufactures, and sells products and systems that manage and conserve the flow of fluids and energy into, through and out of buildings in the residential and commerc ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/22 23:44
End of Day Share Price2019/10/22 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.