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Watts Water (WTS) Approves 5% Hike in Quarterly Dividend

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Watts Water Technologies, Inc.’s (WTS - Free Report) board of directors approved a 5.5% hike in the company’s quarterly common stock dividend. The revised quarterly dividend now comes in at 19 cents per share compared with the previous figure of 18 cents. The dividend will be paid on Jun 16 to shareholders of record as of Jun 2.

This marks the fifth consecutive year of increase in dividend for Watts Water. The raised dividend reflects the company’s focus on capital deployment strategy and commitment to return value to shareholders with solid cash generation capabilities. Prior to this hike, the company had raised its dividend by 5.9% (from 17 cents to 18 cents per share) in Feb 2016.

Watts Water’s efforts to enhance its shareholders’ value are encouraging. During first-quarter 2017, the company repurchased 69,000 shares of Class A common stock for $4.4 million.

Watts Water is well poised to gain from consistent focus on realigning its business and product platforms. Despite softness in the European market, increase in commodity costs,  and weakness in residential and non-residential spending, the company is likely to benefit from its restructuring initiatives and acquisitions.

Over the last one year, Watts Water underperformed the Zacks classified Instruments-Control sub-industry with respect to price performance. The stock gained around 12.6%, while the industry recorded growth of 17.1% over the same time frame.

Zacks Rank & Key Picks

Watts Water currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the same sector are APPLIED OPTOELECTRONICS, INC. (AAOI - Free Report) , Teradyne, Inc. (TER - Free Report) and Brooks Automation, Inc. . All of these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

APPLIED OPTOELECTRONICS has a remarkable positive average earnings surprise of 118.33% for the last four quarters. Teradyne generated a positive average earnings surprise of 25.10% over the trailing four quarters. Brooks Automation has delivered an average positive earnings surprise of 24.11% in the past four quarters.

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