Company Overview
Zurn Elkay Water Solutions Corporation operates within the Industrials sector, specifically focusing on the Pollution & Treatment Controls industry, where it designs, procures, manufactures, and markets water management solutions across the United States, Canada, and international markets. The company's portfolio encompasses a wide array of water dispensing and filtration products, including filtered bottle filling stations, water fountains, and water distribution systems that serve various commercial and residential applications. This entity manages a substantial market capitalization of $7.45B and generates annual revenue of $1.70B, supported by a workforce of 2,600 employees. These valuation and revenue figures indicate that the company holds a significant position in the water infrastructure market, reflecting a large-scale operational footprint and established market presence. The combination of its diversified product offering and global reach suggests a robust business model capable of navigating complex supply chains and regulatory environments associated with water treatment and distribution.
Financial Health
The company reported a trailing twelve-month revenue of $1.70B and net income of $192.40M, with an EBITDA of $375.30M, highlighting a substantial difference between gross revenue and final profit that underscores a significant cost structure including cost of goods sold, operating expenses, and taxes. After accounting for these costs, the business generated free cash flow of $283.05M, which provides the organization with considerable financial flexibility to fund capital expenditures, pursue strategic acquisitions, or manage debt obligations without relying solely on external financing. The profitability profile is characterized by a gross margin of 45.1%, an operating margin of 15.9%, and a profit margin of 11.7%, indicating that the company retains a healthy portion of revenue after direct production costs while maintaining efficient operational leverage. In terms of balance sheet composition, the firm holds $300.50M in cash against $553.20M in debt, resulting in a debt-to-equity ratio of 34.50, which suggests a leveraged capital structure where debt obligations exceed cash reserves. Despite the leverage, the current ratio stands at 3.13, indicating a strong short-term liquidity position where current assets significantly exceed current liabilities, ensuring the ability to meet immediate financial obligations. Return on equity is measured at 12.1% and return on assets at 6.7%, metrics that reveal the effectiveness of management in generating returns from shareholder equity and utilizing the asset base to produce earnings, respectively.
Valuation Assessment
Valuation metrics for Zurn Elkay Water Solutions show a trailing P/E ratio of 39.71 compared to a forward P/E of 24.41, implying that the market expects earnings growth that will narrow the gap between current valuation and future price expectations over the coming years. The price-to-book ratio is recorded at 4.63, indicating that the stock trades at a significant premium over its book value, which often reflects investor confidence in the company's intangible assets, brand strength, or growth prospects beyond simple asset replacement costs. Alternative valuation measures include a price-to-sales ratio of 4.39 and an EV/EBITDA of 20.39, suggesting that investors are willing to pay a high multiple relative to both sales and operating cash generation, which is typical for companies in the pollution control sector with stable cash flows. Regarding trading range, the stock has a 52-week high of $53.17 and a 52-week low of $27.74; without the specific current share price provided in the source data, the exact percentage distance from the high cannot be calculated, but the range demonstrates a wide volatility band of approximately 48% between the recent peaks and troughs. The beta value is 0.77, which means the stock's price volatility is roughly 23% lower than the broader market, indicating a defensive characteristic where the stock tends to be less sensitive to general market fluctuations than the average industrial peer.
Growth & Income
Recent performance data indicates a revenue growth rate of 9.8% year-over-year and an earnings growth rate of 14.7% year-over-year, demonstrating that earnings are expanding at a pace faster than revenue, which implies improving operational efficiency or favorable pricing power that enhances profitability on a per-unit basis. The company offers a dividend yield of 1.0% with a payout ratio of 33.9%, a sustainable distribution policy given that the payout ratio is well below 50% of earnings, leaving ample room to increase dividends or retain earnings for reinvestment. The relatively low payout ratio suggests that the firm retains a significant majority of its profits, potentially reinvesting them into research and development, manufacturing capacity, or market expansion rather than maximizing immediate shareholder returns via dividends. Overall, the growth and income profile presents a balance of moderate dividend income alongside accelerating earnings growth, supported by a conservative liquidity position and a low-beta volatility profile that may appeal to income-focused investors seeking stability in the industrial sector.