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Watts Water (WTS) Hits a 52-Week High: Right Time to Buy?
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Shares of Watts Water Technologies, Inc. (WTS - Free Report) scaled a 52-week high of $60.58 on Jun 20. The new high came on the back of expected benefits from European transformation program, acquisitions and growth in operational efficiencies.
The stock closed a notch lower at $59.82 at the close of trading yesterday, with a solid one-year return of over 9.4% and year-to-date return of 20.4%. The average volume of shares traded over the last three months was roughly 113K.
The company, which manufactures and sells an extensive line of products to the water quality and water regulation and control markets, has a market cap of $2.05 billion. Watts Water has beaten the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 10.74%.
Watts Water remains focused on its acquisition strategy. The company has completed 21 acquisitions in the last 10 years. AERCO, acquired in 2014, was successfully integrated into Watts Water and posted record sales. The business also generated strong profits and cash flows in 2015. Watts Water expects the trend to continue in 2016.
Further, the Apex buyout generated about $3 million in sales during the first quarter of 2016. Sales outside China represented 46% of total Asia-Pacific sales in the first quarter versus 16% a year ago, supported by the addition of Apex plus growth in valve portfolio in countries like Australia, Indonesia and Japan. The company expects this trend to continue as it expands its business into more mature, co-driven countries.
Watts Water’s transformation initiatives in the Americas and EMEA will also drive results. The company has begun shipping from its new state-of-the-art distribution facility in Columbus, OH. This center of excellence will streamline the distribution process via new management warehouse and scanning technology.
Watts Water’s legacy-restructuring actions in EMEA are progressing as planned and should reap the expected savings in 2016. On Apr 20, the company celebrated the grand opening of the Watts Works Learning Center. The new 12,000-square-foot facility, which is located at the North-Andover Corporate Headquarters, will provide a hands-on experience with the company's products and technologies to the customers, distributors and sales representatives.
Recently, Watts Water hiked its quarterly dividend by 6% to 18 cents per share, reflecting its commitment to enhance shareholder value. This hike will increase its dividend yield from the current 1.23% to 1.28%. Its share repurchases activities will also drive growth.
Watts Water currently has a Zacks Rank #3 (Hold).
Stocks to Consider
Better-ranked stocks in the sector include Allied Motion Technologies Inc. , Badger Meter Inc. (BMI - Free Report) and Thermon Group Holdings, Inc. (THR - Free Report) . All these stocks carry a Zacks Rank #2 (Buy).
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Watts Water (WTS) Hits a 52-Week High: Right Time to Buy?
Shares of Watts Water Technologies, Inc. (WTS - Free Report) scaled a 52-week high of $60.58 on Jun 20. The new high came on the back of expected benefits from European transformation program, acquisitions and growth in operational efficiencies.
The stock closed a notch lower at $59.82 at the close of trading yesterday, with a solid one-year return of over 9.4% and year-to-date return of 20.4%. The average volume of shares traded over the last three months was roughly 113K.
The company, which manufactures and sells an extensive line of products to the water quality and water regulation and control markets, has a market cap of $2.05 billion. Watts Water has beaten the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 10.74%.
WATTS WATER TEC Price and Consensus
WATTS WATER TEC Price and Consensus | WATTS WATER TEC Quote
Growth Drivers
Watts Water remains focused on its acquisition strategy. The company has completed 21 acquisitions in the last 10 years. AERCO, acquired in 2014, was successfully integrated into Watts Water and posted record sales. The business also generated strong profits and cash flows in 2015. Watts Water expects the trend to continue in 2016.
Further, the Apex buyout generated about $3 million in sales during the first quarter of 2016. Sales outside China represented 46% of total Asia-Pacific sales in the first quarter versus 16% a year ago, supported by the addition of Apex plus growth in valve portfolio in countries like Australia, Indonesia and Japan. The company expects this trend to continue as it expands its business into more mature, co-driven countries.
Watts Water’s transformation initiatives in the Americas and EMEA will also drive results. The company has begun shipping from its new state-of-the-art distribution facility in Columbus, OH. This center of excellence will streamline the distribution process via new management warehouse and scanning technology.
Watts Water’s legacy-restructuring actions in EMEA are progressing as planned and should reap the expected savings in 2016. On Apr 20, the company celebrated the grand opening of the Watts Works Learning Center. The new 12,000-square-foot facility, which is located at the North-Andover Corporate Headquarters, will provide a hands-on experience with the company's products and technologies to the customers, distributors and sales representatives.
Recently, Watts Water hiked its quarterly dividend by 6% to 18 cents per share, reflecting its commitment to enhance shareholder value. This hike will increase its dividend yield from the current 1.23% to 1.28%. Its share repurchases activities will also drive growth.
Watts Water currently has a Zacks Rank #3 (Hold).
Stocks to Consider
Better-ranked stocks in the sector include Allied Motion Technologies Inc. , Badger Meter Inc. (BMI - Free Report) and Thermon Group Holdings, Inc. (THR - Free Report) . All these stocks carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>