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Here's Why You Should Retain Xylem Stock in Your Portfolio Now
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Key Takeaways
Xylem's Water Solutions orders surged 147% organically, driven by a record 23-year outsourced water contract.
XYL expects 2-3% organic revenue growth as smart metering, commercial buildings & data centers support demand.
Xylem expanded through TriOS and pump deals while returning cash via dividends and share repurchases.
Xylem Inc. (XYL - Free Report) is benefiting from solid momentum in the Water Solutions and Services segment, supported by outsourced water, capital projects and dewatering demand. In second-quarter 2026, the segment’s orders climbed 147% organically to $1.45 billion, driven by an approximately $850 million, 23-year outsourced water contract, the largest in company history. The company’s Applied Water segment is also witnessing strength, supported by strength in the commercial building sector and data-center investment. The segment’s second-quarter organic revenues rose 3% and orders increased 9%, while book-to-bill remained above one.
Strong demand for advanced technology solutions is aiding the Measurement & Control Solutions (M&CS) segment. The segment’s second-quarter 2026 orders increased 2% organically, with strong smart-metering growth offsetting electric metering project delays. Driven by strength across its businesses, Xylem expects year-over-year revenue growth of about 2% on a reported basis and 2-3% on an organic basis.
The company intends to strengthen and expand its businesses through acquisitions. For instance, in July 2026, it completed the TriOS acquisition for approximately €190 million, adding optical sensing and water-quality monitoring technology to M&CS portfolio.
Also, in August 2026, the company entered into a $1.46 billion deal with Indicor for the purchase of Cornell Pump and Roper Pump businesses. The buyout is expected to expand Xylem’s portfolio of specialized pumping solutions and boost its presence across industrial and municipal end markets. The company expects to complete the acquisition in the fourth quarter.
Management remains focused on rewarding its shareholders through dividend payouts. For instance, in the first six months of 2026, Xylem paid dividends of $207 million and repurchased shares worth $1.24 billion. Also, in February 2026, the company hiked its quarterly dividend rate by 8% and authorized a new share buyback program of up to $1.5 billion.
XYL’s Price Performance
Image Source: Zacks Investment Research
In the past month, the Zacks Rank #3 (Hold) company has lost 6.8% compared with the industry’s 4.7% decline.
Xylem is experiencing softness in the Water Infrastructure segment. In the second quarter, the segment’s orders declined 4% organically due to softness in the water treatment business in China. The segment’s revenues in China fell 40%, showing that regional weakness can restrain growth despite healthy municipal demand in U.S. markets.
Xylem’s high debt levels may raise its financial obligations and drain profitability. It exited the second quarter with long-term debt of $2.40 billion, reflecting an increase from $1.41 billion at 2025-end. Considering its high debt level, its cash and cash equivalents of $1.28 billion do not look impressive.
Stocks to Consider
Some better-ranked stocks from the same space are discussed below.
Generac Holdings surpassed the consensus estimate twice and missed in the other two of the trailing four quarters. GNRC delivered a trailing four-quarter average earnings surprise of 13.7%. In the past 60 days, the Zacks Consensus Estimate for Generac Holdings’ 2026 earnings has increased 8.1%.
Helios Technologies (HLIO - Free Report) currently carries a Zacks Rank of 2. Helios Technologies’ earnings topped the consensus estimate in each of the trailing four quarters. The average earnings surprise was 13.1%. In the past 60 days, the Zacks Consensus Estimate for HLIO’s 2026 earnings has increased 10%.
IDEX Corporation (IEX - Free Report) presently carries a Zacks Rank of 2. IDEX’s earnings topped the consensus estimate in each of the trailing four quarters. The average earnings surprise was 7.7%. The Zacks Consensus Estimate for IEX’s 2026 earnings has increased 3.9% over the past 60 days.
View the Zacks #1 Rank List
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Here's Why You Should Retain Xylem Stock in Your Portfolio Now
Key Takeaways
Xylem Inc. (XYL - Free Report) is benefiting from solid momentum in the Water Solutions and Services segment, supported by outsourced water, capital projects and dewatering demand. In second-quarter 2026, the segment’s orders climbed 147% organically to $1.45 billion, driven by an approximately $850 million, 23-year outsourced water contract, the largest in company history. The company’s Applied Water segment is also witnessing strength, supported by strength in the commercial building sector and data-center investment. The segment’s second-quarter organic revenues rose 3% and orders increased 9%, while book-to-bill remained above one.
Strong demand for advanced technology solutions is aiding the Measurement & Control Solutions (M&CS) segment. The segment’s second-quarter 2026 orders increased 2% organically, with strong smart-metering growth offsetting electric metering project delays. Driven by strength across its businesses, Xylem expects year-over-year revenue growth of about 2% on a reported basis and 2-3% on an organic basis.
The company intends to strengthen and expand its businesses through acquisitions. For instance, in July 2026, it completed the TriOS acquisition for approximately €190 million, adding optical sensing and water-quality monitoring technology to M&CS portfolio.
Also, in August 2026, the company entered into a $1.46 billion deal with Indicor for the purchase of Cornell Pump and Roper Pump businesses. The buyout is expected to expand Xylem’s portfolio of specialized pumping solutions and boost its presence across industrial and municipal end markets. The company expects to complete the acquisition in the fourth quarter.
Management remains focused on rewarding its shareholders through dividend payouts. For instance, in the first six months of 2026, Xylem paid dividends of $207 million and repurchased shares worth $1.24 billion. Also, in February 2026, the company hiked its quarterly dividend rate by 8% and authorized a new share buyback program of up to $1.5 billion.
XYL’s Price Performance
Image Source: Zacks Investment Research
In the past month, the Zacks Rank #3 (Hold) company has lost 6.8% compared with the industry’s 4.7% decline.
Xylem is experiencing softness in the Water Infrastructure segment. In the second quarter, the segment’s orders declined 4% organically due to softness in the water treatment business in China. The segment’s revenues in China fell 40%, showing that regional weakness can restrain growth despite healthy municipal demand in U.S. markets.
Xylem’s high debt levels may raise its financial obligations and drain profitability. It exited the second quarter with long-term debt of $2.40 billion, reflecting an increase from $1.41 billion at 2025-end. Considering its high debt level, its cash and cash equivalents of $1.28 billion do not look impressive.
Stocks to Consider
Some better-ranked stocks from the same space are discussed below.
Generac Holdings (GNRC - Free Report) currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Generac Holdings surpassed the consensus estimate twice and missed in the other two of the trailing four quarters. GNRC delivered a trailing four-quarter average earnings surprise of 13.7%. In the past 60 days, the Zacks Consensus Estimate for Generac Holdings’ 2026 earnings has increased 8.1%.
Helios Technologies (HLIO - Free Report) currently carries a Zacks Rank of 2. Helios Technologies’ earnings topped the consensus estimate in each of the trailing four quarters. The average earnings surprise was 13.1%. In the past 60 days, the Zacks Consensus Estimate for HLIO’s 2026 earnings has increased 10%.
IDEX Corporation (IEX - Free Report) presently carries a Zacks Rank of 2. IDEX’s earnings topped the consensus estimate in each of the trailing four quarters. The average earnings surprise was 7.7%. The Zacks Consensus Estimate for IEX’s 2026 earnings has increased 3.9% over the past 60 days.