Quality Investor

Xylem Inc.

Rank #334Capital ReturnWatchlistCompare with other stocks

XYL · NYSE · Industrials

Xylem Inc. (XYL) — Rank #334 by gross profitability (GP/assets 0.20) · ROE 9.3% · Piotroski F-Score 6 / 9.

As-of 2026-10-30 · CIK 0001524472 · all metrics point-in-time as of the filing date.

About

Xylem Inc., together with its subsidiaries, engages in the design, manufacture, and servicing of engineered products and solutions for utility, industrial, and residential and commercial building services settings worldwide.

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It operates through Water Infrastructure; Applied Water; Measurement and Control Solutions; and Water Solutions and Services segments. The company offers water, wastewater, and storm water pumps and controls and systems; filtration, disinfection, and biological treatment equipment under the Flygt, Ionpure, Leopold, Neptune Benson, Sanitare, Wallace & Tiernan, and Wedeco brands; and pumps, valves, heat exchangers, controls, and dispensing equipment used for water and focuses on the residential, commercial and industrial markets under the Rule, Bell & Gossett, Flojet, Goulds Water Technology, Jabsco, and Lowara brands. It also provides smart meters, network communication devices, data analytics, test instruments, controls, sensor devices, software and managed services, critical infrastructure services, cloud-based analytics, and remote monitoring and data management under the Ebro, Sensus, Sentec, Smith Blair, WTW, YSI, and Xylem Vue brands. In addition, the company offers preventative maintenance services, rapid response mobile services, digitally enabled/outsourced solutions, process and wastewater treatment systems, environmental remediation, odor and corrosion control, filtration, reverse osmosis, continuous deionization, and mobile dewatering equipment and rental services; and municipal services comprising odor and corrosion control services, as well as condition assessment and asset management, and pressure monitoring solutions under the Grindex, Mar Cor, and Godwin brands. Xylem Inc. was formerly known as ITT WCO, Inc. and changed its name to Xylem Inc. in July 2011.

The company was incorporated in 2011 and is headquartered in Washington, District Of Columbia.

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

Company Snapshot

P/E and reverse DCF are the primary valuation lenses at this stage.

Market Cap

—

P/E (annual)

—

P/S (annual)

—

P/B

—

P/OCF (annual)

—

Shareholder Yield

—

Employees

22,000

Industry

Specialty Industrial Machinery

Exchange

NYSE

12/12

Flags passed

XYL 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 · 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
0.20
Return on equity
9.3%
Gross margin trend
PASS

Safety

1/1 pass
Balance-sheet safety
PASS
Debt / equity
0.66
Current ratio
1.39×
Net cash
-$2.19B

Cash Flow

2/3 pass
Positive FCF
PASS
Cash-backed earnings
WARN
Accruals healthy
PASS
SBC / revenue
0.6%

Growth

2/2 pass
Revenue growth
5.5%
Piotroski F-Score
6 / 9
Share dilution
0.2%

FCF yield, shareholder yield, and buyback activity are the primary reads at this stage.

Profitability

Does it make money well?

No warning flags · GP/assets 20th percentile of 26 SIC 35 peers

Gross profitability (GP / assets)

0.20

Primary signal (Novy-Marx).

20th pctl of 26 SIC 35 peers

Return on equity

9.3%

Gross margin

38.5%

32nd pctl of 26 SIC 35 peers

Revenue growth (YoY)

5.5%

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)

17.8%

Revenue CAGR (5Y)

13.1%

Earnings CAGR (3Y)

39.2%

FCF CAGR (3Y)

32.9%

Cash Flow Health

Is the cash real?

No warning flags · FCF 5% below net income

Free cash flow

$910.00M

Operating cash flow minus capex.

Positive free cash flow

PASS

FCF vs net income

-4.9%

(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).

WARN

Accruals healthy

Cash-backed earnings.

PASS

SBC / revenue

0.6%

Stock-based comp intensity.

Balance Sheet Strength

Can it survive a storm?

No warning flags · net debt $2.19B, F-Score 6/9

Balance-sheet safety

Composite anti-fragile check.

PASS

Debt / equity

0.66

72nd pctl of 26 SIC 35 peers (best = lowest)

Current ratio

1.39×

20th pctl of 26 SIC 35 peers

Quick ratio

0.94×

Net cash

-$2.19B

Cash & equivalents minus total debt.

Piotroski F-Score

6 / 9

Fundamental-strength score (0-9).

Valuation

Is the price reasonable?

No warning flags

Dividend safety

Composite score

3.8 / 5

Good
Payout ratio
40.9%4/5 Strong
FCF coverage
2.33×4/5 Strong
Dividend growth streak
10 yr5/5 Strong
Balance-sheet health
D/E 0.66 · IC N/A2/5 Fair

Capital allocation quality

Composite score

4.0 / 5

Strong
Share count trend
0.2%2/5 Fair
Buyback timing
N/AN/A
Dividend growth consistency
10 yr5/5 Strong
Net debt trajectory(deleveraging)
5.1%5/5 Strong

Lifecycle Phase History

20202025
Decline
Capital Return
Hypergrowth

Price History

XYL-13.8% · -2.9% CAGRSPY+82.9% · +12.8% CAGR