Quality Investor

Watts Water Technologies, Inc.

Rank #129ValueWatchlistCompare with other stocks

WTS · NYSE · Industrials

Watts Water Technologies, Inc. (WTS) — Rank #129 by gross profitability (GP/assets 0.41) · ROE 15.6% · Piotroski F-Score 6 / 9.

As-of 2026-10-30 · CIK 0000795403 · all metrics point-in-time as of the filing date.

About

Watts Water Technologies, Inc., together with its subsidiaries, supplies products and solutions that manage and conserve the flow of fluids and energy into, through, and out of buildings in the commercial, industrial, and residential markets.

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The company offers residential and commercial flow control and protection products, including backflow preventers, water pressure regulators, temperature and pressure relief valves, thermostatic mixing valves, leak detection and protection products, commercial washroom solutions, hydration solutions, and emergency safety products and equipment for plumbing and hot water applications. It also provides heating, ventilation, and air conditioning and gas products comprising commercial, institutional, and industrial boilers; water heaters and heating solutions; 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, such as drainage products, engineered rainwater harvesting solutions for commercial, industrial, marine, and residential applications; connected roof drain systems; and water quality products, including point-of-use and point-of-entry, closed loop, cooling tower, and other water applications for commercial, marine, and residential applications. It sells its products to plumbing, heating, and mechanical wholesale distributors and dealers; original equipment manufacturers; specialty product distributors; and do-it-yourself and retail chains, as well as wholesalers and private label accounts in the Americas, Europe, Asia-Pacific, Middle East, and Africa. Watts Water Technologies, Inc.

was founded in 1874 and is headquartered in North Andover, Massachusetts.

Industry
Specialty Industrial Machinery
Sector
Industrials
State
DE
Filer Category
Large accelerated filer
Fiscal Year End
December 31
Website
watts.com

Company Snapshot

P/E and dividend yield are the primary valuation lenses for mature businesses.

Market Cap

—

P/E (annual)

—

P/S (annual)

—

P/B

—

P/OCF (annual)

—

Shareholder Yield

—

Employees

5,700

Industry

Specialty Industrial Machinery

Exchange

NYSE

12/12

Flags passed

WTS passes 12/12 quality flags

  • PASS
    Gross margin holding
  • PASS
    Dilution within 2%
  • PASS
    FCF not negative from investment
  • PASS
    Disclosure consistent
  • PASS
    Revenue not declining
  • PASS
    Operating margin holding
  • PASS
    Free cash flow intact
  • PASS
    Passes safety gate
  • PASS
    Balance sheet stable
  • PASS
    No competitive retreat
  • PASS
    SBC not compressing margin
  • PASS
    No valuation convergence

Strengths Operating leverage expanding · Deferred revenue growing · Sequential beat (rev + EPS)

A count of the 12 warning flags that could be evaluated. Unweighted: colour follows the worst flag.

Quality Profile

Profitability

1/1 pass
GP / assets
0.41
Return on equity
15.6%
Gross margin trend
PASS

Safety

1/1 pass
Balance-sheet safety
PASS
Debt / equity
0.35
Current ratio
2.66×
Net cash
$239.90M

Cash Flow

3/3 pass
Positive FCF
PASS
Cash-backed earnings
PASS
Accruals healthy
PASS
SBC / revenue
0.9%

Growth

2/2 pass
Revenue growth
8.3%
Piotroski F-Score
6 / 9
Share dilution
0.0%

Dividend yield and payout ratio are the primary reads at this stage (trailing P/E — see valuation above).

Profitability

Does it make money well?

No warning flags · GP/assets 0.41

Gross profitability (GP / assets)

0.41

Primary signal (Novy-Marx).

1st of 5 SIC 3490 peers

Return on equity

15.6%

Gross margin

49.5%

1st of 5 SIC 3490 peers

Revenue growth (YoY)

8.3%

Gross margin improving

Margin trend vs prior year.

PASS

Operating Leverage

2022202320242025
Revenue vs COGS
Revenue vs OpEx
Op. Income vs Revenue

Growth

Revenue CAGR (3Y)

7.2%

Revenue CAGR (5Y)

10.1%

Earnings CAGR (3Y)

10.7%

FCF CAGR (3Y)

22.1%

Cash Flow Health

Is the cash real?

No warning flags · FCF 5% above net income

Free cash flow

$356.30M

Operating cash flow minus capex.

Positive free cash flow

PASS

FCF vs net income

4.5%

(FCF − net income) ÷ |net income|. Positive: cash above earnings. Negative: below.

FCF not below net income

Fails when free cash flow is below net income (yellow flag).

PASS

Accruals healthy

Cash-backed earnings.

PASS

SBC / revenue

0.9%

Stock-based comp intensity.

Balance Sheet Strength

Can it survive a storm?

No warning flags · net cash $239.90M, F-Score 6/9

Balance-sheet safety

Composite anti-fragile check.

PASS

Debt / equity

0.35

1st of 5 SIC 3490 peers (best = lowest)

Current ratio

2.66×

4th of 5 SIC 3490 peers

Quick ratio

1.47×

Net cash

$239.90M

Cash & equivalents minus total debt.

Piotroski F-Score

6 / 9

Fundamental-strength score (0-9).

Valuation

Is the price reasonable?

No warning flags

Capital allocation quality

Composite score

3.0 / 5

Good
Share count trend
0.0%3/5 Good
Buyback timing
N/AN/A
Dividend growth consistency(non-payer or broken streak)
0 yr3/5 Good
Net debt trajectory(deleveraging)
0.6%3/5 Good

Lifecycle Phase History

20202025
Decline
Op. Leverage
Value

Price History

WTS+108.7% · +15.8% CAGRSPY+82.9% · +12.8% CAGR