Contrasting Watts Water Technologies (WTS) and Barnes Group (B)

Watts Water Technologies (NYSE: WTS) and Barnes Group (NYSE:B) are both mid-cap computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, valuation, earnings, analyst recommendations and risk.

Dividends

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Watts Water Technologies pays an annual dividend of $0.76 per share and has a dividend yield of 1.0%. Barnes Group pays an annual dividend of $0.56 per share and has a dividend yield of 0.9%. Watts Water Technologies pays out 25.2% of its earnings in the form of a dividend. Barnes Group pays out 19.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Watts Water Technologies has raised its dividend for 5 consecutive years and Barnes Group has raised its dividend for 5 consecutive years.

Earnings and Valuation

This table compares Watts Water Technologies and Barnes Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Watts Water Technologies $1.46 billion 1.86 $73.10 million $3.02 26.27
Barnes Group $1.44 billion 2.32 $59.41 million $2.88 21.70

Watts Water Technologies has higher revenue and earnings than Barnes Group. Barnes Group is trading at a lower price-to-earnings ratio than Watts Water Technologies, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Watts Water Technologies and Barnes Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Watts Water Technologies 5.02% 12.93% 6.02%
Barnes Group 4.15% 12.36% 6.87%

Volatility & Risk

Watts Water Technologies has a beta of 1.1, suggesting that its share price is 10% more volatile than the S&P 500. Comparatively, Barnes Group has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500.

Institutional and Insider Ownership

77.2% of Watts Water Technologies shares are owned by institutional investors. Comparatively, 87.8% of Barnes Group shares are owned by institutional investors. 1.1% of Watts Water Technologies shares are owned by insiders. Comparatively, 8.5% of Barnes Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Watts Water Technologies and Barnes Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Watts Water Technologies 0 6 3 0 2.33
Barnes Group 0 3 3 0 2.50

Watts Water Technologies presently has a consensus target price of $79.50, indicating a potential upside of 0.19%. Barnes Group has a consensus target price of $67.00, indicating a potential upside of 7.20%. Given Barnes Group’s stronger consensus rating and higher possible upside, analysts clearly believe Barnes Group is more favorable than Watts Water Technologies.

Summary

Barnes Group beats Watts Water Technologies on 8 of the 15 factors compared between the two stocks.

About Watts Water Technologies

Watts Water Technologies, Inc. designs, manufactures, and sells products and systems that manage and conserve the flow of fluids and energy into, through and out of buildings in the residential and commercial markets. It offers residential and commercial flow control products, including backflow preventers, water pressure regulators, temperature and pressure relief valves, and thermostatic mixing valves. The company also provides heating, ventilation, and air conditioning and gas products comprising boilers, water heaters, and heating solutions; hydronic and electric heating systems for under-floor radiant applications; custom heat and hot water solutions; hydronic pump groups for boiler manufacturers and alternative energy control packages; and flexible stainless steel connectors for natural and liquid propane gas in commercial food service and residential applications. In addition, it offers drainage and water re-use products consisting of drainage products and engineered rain water harvesting solutions for commercial, industrial, marine, and residential applications; and water quality products, such as point-of-use and point-of-entry water filtration, conditioning, and scale prevention systems for commercial and residential applications. The company sells its products to plumbing, heating, and mechanical wholesale distributors and dealers, as well as original equipment manufacturers, specialty product distributors, and do-it-yourself (DIY) chains; and directly to wholesalers and private label accounts. It operates in the Americas, Europe, the Middle East and Africa, and the Asia-Pacific. Watts Water Technologies, Inc. was founded in 1874 and is headquartered in North Andover, Massachusetts.

About Barnes Group

Barnes Group Inc. operates as an industrial and aerospace manufacturer, and service provider in the United States and internationally. Its Industrial segment offers precision components, products, and systems for applications serving various customers in end-markets, such as transportation, industrial equipment, consumer products, packaging, electronics, medical devices, and energy. This segment also manufactures and supplies precision mechanical products, including mechanical springs, high-precision punched and fine-blanked components, and retention rings; force and motion solutions for sheet metal forming, heavy duty suspension, and other markets; and hot runner systems, mold cavity sensors and process control systems, and precision high cavitation mold for injection molding applications. The company's Aerospace segment produces fabricated and precision-machined components and assemblies for original equipment manufacturer turbine engine, airframe, and industrial gas turbine builders, as well as for the military. It also offers maintenance, repair, and overhaul services for jet engine components to turbine engine manufacturers, commercial airlines, and the military. In addition, this segment manufactures aerospace aftermarket spare parts. The company sells its products primarily through its direct sales force and distribution channels. Barnes Group Inc. was founded in 1857 and is headquartered in Bristol, Connecticut.

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