Fact based stock research
Watts Water Technologies (NYSE:WTS)

US9427491025

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Watts Water Technologies stock research in summary

watts.com

ANALYSIS: With an Obermatt Combined Rank of 60 (better than 60% compared with investment alternatives), Watts Water Technologies (Industrial Machinery, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Watts Water Technologies are low in value (priced high) with a consolidated Value Rank of 37 (worse than 63% of alternatives) and show below-average growth (Growth Rank of 35) but are safely financed (Safety Rank of 94), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 60, is a buy recommendation based on Watts Water Technologies's financial characteristics. As the company Watts Water Technologies's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 37) and low growth (Obermatt Growth Rank of 35), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 94) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	37
Growth Rank	35
Safety Rank	94
Combined Rank	60

Country	USA
Industry	Industrial Machinery
Index	Water Tech
Size class	Large

This stock has achievements: Top 10 Stock.

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Watts Water Technologies

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	31	15	24	37
GROWTH
GROWTH	68	69	89	35
SAFETY
SAFETY	50	82	93	94
SENTIMENT
SENTIMENT	n/a	30	63	^new
360° VIEW
360° VIEW	n/a	45	86	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Watts Water Technologies is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	31	15	24	37
GROWTH
GROWTH	68	69	89	35
SAFETY
SAFETY	50	82	93	94
COMBINED
COMBINED	45	68	84	60

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Watts Water Technologies the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 37 (worse than 63% compared with alternatives), Watts Water Technologies shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Watts Water Technologies. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 61% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 27 which means that the stock price compared with what market professionals expect for future profits is higher than 73% of comparable companies, indicating a low value concerning Watts Water Technologies's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 39 which means that the stock price compared with what market professionals expect for future profit levels is higher than 61% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 43 is also low. Compared with invested capital, the stock price is higher than for 57% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 37, is a hold recommendation based on Watts Water Technologies's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Watts Water Technologies? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Watts Water Technologies only if they reasonably expect the low current profit levels to be transitory. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	34	21	13	27
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	45	8	23	39
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	14	28	29	43
DIVIDEND YIELD
DIVIDEND YIELD	44	57	55	61
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	31	15	24	37

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Watts Water Technologies; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 35 (better than 35% compared with alternatives), Watts Water Technologies shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Watts Water Technologies. Only Capital Growth has a good rank of 90, which means that currently professionals expect the company to grow its invested capital more than 43% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 20 which means that currently professionals expect the company to grow less than 80% of its competitors. Profit Growth with a rank of 43 and Stock Returns with a rank of 29 are also low (below 71% of alternative investments). ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 35, is a hold recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Watts Water Technologies is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is limited here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	39	14	85	20
PROFIT GROWTH
PROFIT GROWTH	50	58	57	43
CAPITAL GROWTH
CAPITAL GROWTH	n/a	67	95	90
STOCK RETURNS
STOCK RETURNS	86	93	67	29
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	68	69	89	35

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Watts Water Technologies.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 94 (better than 94% compared with alternatives) for 2024, the company Watts Water Technologies has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Watts Water Technologies is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for Watts Water Technologies. Leverage is at a rank of 84, meaning the company has a below-average debt-to-equity ratio. It has less debt than 84% of its competitors. Liquidity is also good at a rank of 96, meaning the company generates more profit to service its debt than 96% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 44, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 56% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 94 (better than 94% compared with alternatives), Watts Water Technologies has a financing structure that is significantly safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Watts Water Technologies. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. Investors may have a short-term debt challenge with Watts Water Technologies and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	56	78	86	84
REFINANCING
REFINANCING	22	20	34	44
LIQUIDITY
LIQUIDITY	70	86	95	96
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	50	82	93	94

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Watts Water Technologies and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	7	7	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	30	82	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	76	67	^new
MARKET PULSE
MARKET PULSE	n/a	60	75	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	30	63	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Watts Water Technologies.
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