Buffett Brain · Research note
Score updated 26 Sept 2026 · analysis from 26 Jul 2026
WTS· Industrials
Watts Water Technologies
Watts Water Technologies shows strong durability and management quality, but its valuation metrics suggest it may be overvalued at current prices.
Buffett fit
Partial fit
Owner
53
Durability
93
Management
86
Price
29
Score updated 26 Sept 2026 · analysis from 26 Jul 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Industrials stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned Watts Water Technologies outright, I would focus on maintaining the strong margins and managing growth effectively.
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The 10-year outlook appears strong with consistent profitability over the last five years and no EPS decline.
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Management has shown discipline with a share count CAGR of -0.22% and a yield of 0.27%, indicating a commitment to returning value to shareholders.
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Currently, the yield is 3.58%, which is below my target of 8-10%.
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- The 5-year price target and the return it implies
- What would change the call
- Graham, Lynch and Greenblatt on the same stock
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
5- 15-year EPS CAGR of 20.03% indicates strong growth potential.
- 2 of 49.25% ranks in the top quintile for the sector.
- 3 of 19.41% also exceeds the sector's top-quintile cutoff of 17.8%.
- 4 of 15.18% is above the sector's top-quintile cutoff of 13.6%.
Concerns
5- 1 of 27.3 is significantly above the target valuation range of 10-12.
- 2 yield of 3.58% is below the ideal threshold of 8-10%.
- 3 yield of 0.27% is low, suggesting limited shareholder return focus.
- 4Current ratio of 2.72 is strong, but may indicate excess liquidity not being utilized effectively.
Price history
$357+87.8%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Watts Water Technologies designs and manufactures products for fluid and energy management across various markets. With TTM revenue of $2.44B and a net income of $340.8M, the company operates with a of 49.25%. The diverse product line supports steady cash flow, indicating solid unit economics.
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
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Questions about Watts Water Technologies
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