Watts Water Technologies

WTS

Industrial - Machinery · Industrials

Price

$375.57

+5.67 (+1.53%)

Market Cap

$12.54B

Winston Score

Winston is happy

A high-quality business with solid fundamentals.

Data as of Aug 23, 2026 · filings through Jun 28, 2026

How the score breaks down

Quality

Strong

Growth

Exceptional

Cash Flow

Strong

Stability

Exceptional

Valuation

Good

Dividends

Good

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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)

Winston Score History

The full picture

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.

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

+18.6% YoY

YoY Growth Rate

Steady revenue growth

EPS Growth

+17.3% YoY

YoY Growth Rate

Steady EPS growth

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

Insider ownership roughly steady over the past year

Cash Position

Cash flow positive

$348M cash & investments

Quarterly Free Cash Flow

↓ Burn rate worsening

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 19%. 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

Profit per sale

Gross Margin

49.0%

Healthy — 49.0% gross margin

Profit after running costs

Operating Margin

20.2%

Excellent — 20.2% operating margin

Return on the money invested

ROCE

22.4%

Exceptional — 22.4% return on capital

ROIC between 15% and 25%. Every dollar invested in the business earns 15 to 25 cents back per year.

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Growth

Sales growth

Sales YoY

+17.1%

Fast-growing sales (+17.1% YoY)

Profit growth

EPS YoY

+23.2%

Earnings growing fast (+23.2% YoY)

Healthy double-digit earnings growth — what compounders look like.

How steady the profit is

EPS Consistency

8/8 quarters

Every recent quarter grew earnings vs last year

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Cash Flow

Profit that turns into cash

Cash Conversion

108%

Turns 108% of profit into real cash

Spare cash per sale

FCF Margin

13.3%

Converts sales into free cash efficiently (13.3%)

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

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Stability

What it owes vs what it owns

Debt / Equity

0.05

Conservative — low debt load (0.05)

Covers its interest

Interest Cover

50.50x

Comfortably covers interest (50.5x)

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

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Valuation

Price vs profit

P/E Ratio (TTM)

32.8x

Pricey — P/E 32.8

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

Cheaper or dearer next year

P/E vs Forward

+8.7

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (32.8 → 24.0)

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Dividends

Dividend

Dividend Yield

0.64%

Small dividend — 0.64% yield

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

Dividend record

Dividend Growth

+21.0%

Dividend growing fast (21.0% YoY)

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