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.

Rewards

Earnings are forecast to grow 8.75% per year

Earnings grew by 2.7% over the past year

Pays a reliable dividend of 0.86%

Risk Analysis

No risks detected for WTS from our risk checks.


Snowflake Analysis

Flawless balance sheet with proven track record 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

Stable Share Price: WTS has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

6.8%

WTS

1.5%

US Machinery

1.5%

US Market


1 Year Return

32.5%

WTS

11.4%

US Machinery

20.1%

US Market

Return vs Industry: WTS exceeded the US Machinery industry which returned 11.4% over the past year.

Return vs Market: WTS exceeded the US Market which returned 20.1% over the past year.


Shareholder returns

WTSIndustryMarket
7 Day6.8%1.5%1.5%
30 Day5.5%-2.1%1.4%
90 Day12.5%2.0%8.7%
1 Year33.8%32.5%13.4%11.4%22.7%20.1%
3 Year77.6%71.9%37.2%28.4%50.1%40.5%
5 Year104.2%93.1%64.0%44.5%73.1%54.1%

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?

27.75x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: WTS ($107) is trading above our estimate of fair value ($103.51)

Significantly Below Fair Value: WTS is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: WTS is poor value based on its PE Ratio (27.7x) compared to the Machinery industry average (21.4x).

PE vs Market: WTS is poor value based on its PE Ratio (27.7x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: WTS is poor value based on its PEG Ratio (3.2x)


Price to Book Ratio

PB vs Industry: WTS is overvalued based on its PB Ratio (3.7x) compared to the US Machinery industry average (2.2x).


Next Steps

Future Growth

How is Watts Water Technologies forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

8.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: WTS's forecast earnings growth (8.7% per year) is above the savings rate (1.7%).

Earnings vs Market: WTS's earnings (8.7% 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 (2.8% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: WTS's revenue (2.8% 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?

39.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: WTS has high quality earnings.

Growing Profit Margin: WTS's current net profit margins (8.2%) are higher than last year (8.2%).


Past Earnings Growth Analysis

Earnings Trend: WTS's earnings have grown significantly by 39.6% per year over the past 5 years.

Accelerating Growth: WTS's earnings growth over the past year (2.7%) is below its 5-year average (39.6% per year).

Earnings vs Industry: WTS earnings growth over the past year (2.7%) exceeded the Machinery industry 2.1%.


Return on Equity

High ROE: WTS's Return on Equity (13.4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Watts Water Technologies's financial position?


Financial Position Analysis

Short Term Liabilities: WTS's short term assets ($734.9M) exceed its short term liabilities ($419.3M).

Long Term Liabilities: WTS's short term assets ($734.9M) exceed its long term liabilities ($325.8M).


Debt to Equity History and Analysis

Debt Level: WTS's debt to equity ratio (27.2%) is considered satisfactory.

Reducing Debt: WTS's debt to equity ratio has reduced from 63.6% to 27.2% over the past 5 years.

Debt Coverage: WTS's debt is well covered by operating cash flow (73%).

Interest Coverage: WTS's interest payments on its debt are well covered by EBIT (14.7x 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 2.8x debt).


Next Steps

Dividend

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

0.86%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Watts Water Technologies before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company0.9%marketbottom25%1.4%markettop25%3.7%industryaverage1.9%forecastin3Years0.9%

Current dividend yield vs market & industry

Notable Dividend: WTS's dividend (0.86%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: WTS's dividend (0.86%) is low compared to the top 25% of dividend payers in the US market (3.69%).


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.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (23.3%), 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 (18.2% payout ratio).


Next Steps

Management

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

4.0yrs

Average management tenure


CEO

Bob Pagano (56yo)

5.8yrs

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 ($USD5.85M) is about average for companies of similar size in the US market ($USD4.88M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Robert Pagano
CEO, President & Director5.8yrsUS$5.85m0.43% $15.4m
Shashank Patel
Chief Financial Officer1.6yrsUS$2.08m0.051% $1.8m
Kenneth Lepage
Executive VP11.5yrsUS$1.58m0.12% $4.4m
Elie Melhem
President of Asia-Pacific4yrsUS$1.50m0.074% $2.7m
Munish Nanda
President of Americas & Europe4yrsUS$2.38m0.11% $3.9m
Virginia Halloran
Chief Accounting Officer4.1yrsno data0.030% $1.1m
Timothy MacPhee
VP of Investor Relations & Treasurer0yrsno datano data
Ram Ramakrishnan
Executive Vice President of Strategy & Business Development6.3yrsno datano data
Jennifer Congdon
Chief Human Resources Officer3.2yrsno data0.044% $1.6m

4.0yrs

Average Tenure

54yo

Average Age

Experienced Management: WTS's management team is considered experienced (4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Robert Pagano
CEO, President & Director5.8yrsUS$5.85m0.43% $15.4m
Louise Goeser
Independent Director1.9yrsUS$196.24k0.0092% $332.6k
Merilee Raines
Independent Director9yrsUS$203.90k0.048% $1.7m
W. Kissel
Independent Chairman of the Board0yrsUS$247.03k0.044% $1.6m
Timothy Horne
Director Emeritus9.8yrsUS$722.22k18.45% $668.7m
Christopher Conway
Independent Director4.7yrsUS$198.90k0.011% $381.6k
David Dunbar
Independent Director3yrsUS$183.90k0.014% $505.1k
Joseph Reitmeier
Independent Director4yrsUS$183.90k0.0068% $246.4k
Joseph Noonan
Director6.8yrsUS$183.90k0.056% $2.0m
Jes Hansen
Independent Director3yrsUS$183.90k0.014% $505.1k

4.7yrs

Average Tenure

60yo

Average Age

Experienced Board: WTS's board of directors are considered experienced (4.7 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.


Top Shareholders

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$3.624b
  • Shares outstanding: 33.87m
  • 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 commercial markets. 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, and heating solution; 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. In addition, the company offers drainage and water re-use products comprising drainage products and engineered rain water harvesting solutions for commercial, industrial, marine, and residential applications; and water quality products that include point-of-use and point-of-entry water filtration, conditioning, and scale prevention systems for commercial and residential applications. It sells its products to plumbing, heating, and mechanical wholesale distributors and dealers, as well as original equipment manufacturers, specialty product distributors, and do-it-yourself chains; and directly to wholesalers and private label accounts. The company has operations in the Americas, Europe, the Asia-Pacific, the Middle East, and Africa. Watts Water Technologies, Inc. was founded in 1874 and is headquartered in North Andover, Massachusetts. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/16 23:45
End of Day Share Price2020/02/14 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


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.