Since July 2021, the S&P 500 has delivered a total return of 73.1%. But one standout stock has nearly doubled the market - over the past five years, Watts Water Technologies has surged 138% to $346.95 per share. Its momentum hasn’t stopped as it’s also gained 19.5% in the last six months thanks to its solid quarterly results, beating the S&P by 10.1%.
Is now still a good time to buy WTS? Or are investors being too optimistic? Find out in our full research report, it’s free.
Why Are We Positive on Watts Water Technologies?
Founded in 1874, Watts Water (NYSE: WTS) specializes in manufacturing water products and systems for residential, commercial, and industrial applications globally.
1. Skyrocketing Revenue Shows Strong Momentum
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Watts Water Technologies grew its sales at an impressive 10.7% compounded annual growth rate. Its growth surpassed the average industrials company and shows its offerings resonate with customers.
2. Outstanding Long-Term EPS Growth
Analyzing the long-term change in earnings per share (EPS) shows whether a company’s incremental sales were profitable — for example, revenue could be inflated through excessive spending on advertising and promotions.
Watts Water Technologies’s EPS grew at 21.9% compounded annual growth rate over the last five years, higher than its 10.7% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
3. Increasing Free Cash Flow Margin Juices Financials
If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.
As you can see below, Watts Water Technologies’s margin expanded by 6.1 percentage points over the last five years. This is encouraging because it gives the company more optionality. Watts Water Technologies’s free cash flow margin for the trailing 12 months was 12.4%.
Final Judgment
These are just a few reasons Watts Water Technologies is a rock-solid business worth owning, and with its shares topping the market in recent months, the stock trades at 28.9× forward P/E (or $346.95 per share). Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More Than Watts Water Technologies
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Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.
