Watts Water Technologies

WTS

Industrial - Machinery · Industrials

Price

$346.43

-6.97 (-1.97%)

Market Cap

$11.57B

Winston Score

Winston is curious

A decent business — some strong pillars, some weaker.

Share count falling — buybacks

−1.2% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 33.9M (2021) → 33.5M (2025)

Watts Water Technologies makes products that control and manage water in buildings. Its core products include valves, regulators, flow control devices, and water quality systems used in plumbing, heating, and cooling systems. The company sells mainly to contractors, wholesalers, and building owners across residential, commercial, and industrial construction markets.

Watts earns revenue by selling hardware and engineered components, not through subscriptions or software. It operates primarily in North America and Europe, with smaller business in Asia-Pacific, and generates roughly $2 billion in annual sales. Its competitive position comes from long-standing customer relationships, a broad product portfolio, and the fact that its components are often required by building codes and safety regulations, making switching costs relatively high. The main risk the company faces is exposure to new construction activity, which slows sharply when interest rates rise and building projects get delayed or cancelled.

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+21.4% YoY

YoY Growth Rate

Steady revenue growth

EPS Growth

+34.4% YoY

YoY Growth Rate

EPS growth accelerating

R&D Spend

$0/ year

↓ Declining (-100% vs prior year)

0.0% of revenue

Below sector average (4%)

R&D spend declining — could signal cost-cutting or efficiency

Insider Activity

1.5%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$375M cash & investments

Quarterly Free Cash Flow

→ Burn rate stable

Company generates more cash than it spends — no dilution risk from fundraising

Growth + cash flow

Watts Water Technologies is a rare growth stock that's already generating positive cash flow while growing at 21%. The Winston Score doesn't fully credit this transition from "burner" to "earner."

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

Each metric is explained in plain language so you know exactly what you're looking at. Start your free trial now.

Quality

Gross Margin

48.1%

Healthy — 48.1% gross margin

Operating Margin

19.6%

Healthy — 19.6% operating margin

ROCE

5.8%

Weak — 5.8% return on capital

ROIC between 5% and 15%. They earn 5 to 15 cents back per year on every dollar invested.

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Growth

Sales YoY

+14.2%

Fast-growing sales (14.2% YoY)

EPS YoY

+25.2%

Earnings growing fast (25.2% YoY)

Earnings growing 25%+ a year. The compounder zone.

EPS Consistency

8/8 quarters

Every recent quarter grew earnings vs last year

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Cash Flow

Cash Conversion

100%

Turns 100% of profit into real cash

FCF Margin

12.4%

Converts sales into free cash efficiently (12.4%)

FCF margin between 10% and 20%. Every $100 in sales becomes $10 to $20 in real cash.

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Stability

Debt / Equity

0.09

Conservative — low debt load (0.09)

Interest Cover

46.39x

Comfortably covers interest (46.4x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)

31.7x

Pricey — P/E 31.7

P/E above the market average. People are paying up for expected growth.

P/E vs Forward

+3.0

GROWING

Earnings expected to grow — slightly cheaper on forward P/E

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Dividends

Dividend Yield

0.59%

Small dividend — 0.59% yield

Modest yield. The bulk of any return needs to come from price appreciation.

Dividend Growth

+21.0%

Dividend growing fast (21.0% YoY)

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