Watts Water Technologies Inc

Watts Water Technologies makes valves, regulators, drains, boilers, water heaters and filters that manage the flow of water and heat into, through and out of commercial and residential buildings. It grew from a machine shop Joseph E. Watts founded in Lawrence, Massachusetts, in 1874. Most of its sales come from products approved under plumbing, heating, building and fire codes, such as backflow preventers, which keep dirty water from flowing back into drinking supplies.

Watts reaches end users mainly through distributors. In fiscal 2025, about 66% of net sales went to plumbing and heating wholesalers, 21% through specialty channels, 10% to original equipment manufacturers (OEMs) such as water heater and boiler makers, and 3% to do-it-yourself retail chains. No customer topped 10% of sales, and the top ten together made up 23.4%.

Fiscal 2025 revenue was $2.44 billion, and 18.4% of it was left as operating profit. Residential and commercial flow control and protection products made up 61%, heating, ventilation and air conditioning (HVAC) and gas products about 23%, drainage and water re-use about 11%, and water quality about 5%. By region, the Americas supplied 75.8% of revenue, Europe 18.5%, and Asia-Pacific, the Middle East and Africa 5.8%. Acquisitions add to growth: Watts has completed 17 since 2016.

• In Q2 FY2026 (ended Jun 28, 2026), revenue was $763.2M, up 18.6% from a year earlier, and net income was $118.3M (+17.2%).
• For fiscal 2025, revenue was $2.44B (+8.3% year over year; +10.1% a year from FY2020 to FY2025) with a 14% net margin.

• Over FY2021–FY2025: $134.4M in buybacks and $242.7M in dividends.
• At least 9 consecutive annual increases: every fiscal year in the SEC data (FY2016–FY2025) shows an increase; the true streak may be longer.
• Regular dividends per share grew +16.7% a year over 5 years (FY2020–FY2025).
• Dividends took 19.6% of earnings and 18.8% of free cash flow in the latest fiscal year.

Rank among 1514 US companies

Form 4 filings from 2025-10-29 to 2026-10-29 (25 read): 0 open-market purchases and 9 sales ($3.6M), 3 of them under pre-arranged 10b5-1 trading plans.

Large shareholders (13G filings)

ETFs with the most weight in WTS

1. Tariffs and metal prices can squeeze margins. Watts relies on bronze, brass, cast iron, stainless steel and plastic from suppliers, typically without long-term contracts. Tariffs on imports from Canada, China and Mexico have raised costs that price increases may not fully cover.
2. Construction and remodeling slowdowns hit demand. Sales track commercial and residential construction starts and remodeling, which weaken when interest rates rise, jobs dry up or confidence falls. Its main customers, plumbing wholesalers and equipment makers, rise and fall with the economy.
3. One stockholder holds outsized influence. The company warns one stockholder can exercise substantial influence; Timothy P. Horne reported 17.7% ownership as of September 30, 2026. Large sales of converted Class B shares could weigh on the Class A price.
4. Building code changes could hurt demand. Most sales come from products approved under plumbing, heating, building and fire codes, which helps drive demand. The company warns that changes to regulations or standards could hurt its business.
5. Product defects could bring recalls and lawsuits. Watts makes safety devices for water systems in homes and commercial buildings. A defect could trigger recalls, warranty claims above the amounts set aside, and product liability lawsuits.
6. Acquisitions may not deliver expected results. Watts has completed 17 acquisitions since 2016, including eight in the three years through fiscal 2025. Poorly integrated deals could hurt growth and profits and force write-downs that reduce reported earnings.

• Oct 1, 2026 Executive or board change
• Aug 5, 2026 Quarterly results released
• May 20, 2026 Shareholder vote results
• May 6, 2026 Quarterly results released
• Feb 11, 2026 Quarterly results released
• Nov 17, 2025 Executive or board change
• Nov 10, 2025 Major agreement signed; Executive or board change
• Nov 5, 2025 Quarterly results released

Watts pays a small but fast-growing dividend. Dividends per share rose from $0.92 in fiscal 2020 to $1.99 in fiscal 2025, about 16.7% a year, with at least 9 consecutive annual increases through fiscal 2025. That dividend used 19.6% of earnings and 18.8% of free cash flow (cash left after running and investing in the business), a low share that leaves a cushion if profits dip. The yield was only 0.67% as of October 28, 2026. Share repurchases were smaller: $134.4 million over fiscal 2021–2025, against $242.7 million in dividends.

The shares have fallen hard in downturns: 49.8% in the 2008 financial crisis, 32% in the 2020 COVID crash and 39.4% in the 2022 market slump. They regained their earlier highs about six months after the 2008 and 2020 lows but took nearly 14 months after the 2022 low. Single stocks carry more risk than diversified funds, because one company's problems are not offset by other holdings.