The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how water infrastructure stocks fared in Q1, starting with Watts Water Technologies (NYSE:WTS).
Trends towards conservation and reducing groundwater depletion are putting water infrastructure and treatment products front and center. Companies that can innovate and create solutions–especially automated or connected solutions–to address these thematic trends will create incremental demand and speed up replacement cycles. On the other hand, water infrastructure and treatment companies are at the whim of economic cycles. Consumer spending and interest rates, for example, can greatly impact the industrial production that drives demand for these companies’ offerings.
The 4 water infrastructure stocks we track reported an impressive Q1; on average, revenues beat analyst consensus estimates by 6.1%. Stocks, especially growth stocks where cash flows further in the future are more important to the story, had a good end of 2023. But the beginning of 2024 has seen more volatile stock performance due to mixed inflation data, and water infrastructure stocks have held roughly steady amidst all this, with share prices up 1.2% on average since the previous earnings results.
Watts Water Technologies (NYSE:WTS) Founded in 1874, Watts Water (NYSE:WTS) specializes in manufacturing water products and systems for residential, commercial, and industrial applications globally.
Watts Water Technologies reported revenues of $570.9 million, up 21% year on year, exceeding analysts' expectations by 4.6%. Overall, it was a stunning quarter for the company with an impressive beat of analysts' organic revenue estimates and a decent beat of analysts' earnings estimates.
The stock is down 9.4% since reporting and currently trades at $192.24.
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Best Q1: Mueller Water Products (NYSE:MWA) As one of the oldest companies in the water infrastructure industry, Mueller (NYSE:MWA) is a provider of water infrastructure products and flow control systems for various sectors.
Mueller Water Products reported revenues of $353.4 million, up 6.2% year on year, outperforming analysts' expectations by 18%. It was an incredible quarter for the company with an impressive beat of analysts' organic revenue and earnings estimates.
Mueller Water Products scored the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 19.5% since reporting. It currently trades at $19.77.
Xylem (NYSE:XYL) Formed through a spinoff, Xylem (NYSE:XYL) manufactures and services engineered products across a wide variety of applications primarily in the water sector.
Xylem reported revenues of $2.03 billion, up 40.4% year on year, exceeding analysts' expectations by 1.8%. It was still a strong quarter for the company with a solid beat of analysts' organic revenue estimates and a decent beat of analysts' earnings estimates.
Interestingly, the stock is up 4.9% since the results and currently trades at $137.31.
Tennant (NYSE:TNC) As the world’s largest manufacturer of autonomous mobile robots, Tennant (NYSE:TNC) designs, manufactures, and sells cleaning products to various sectors.
Tennant reported revenues of $311 million, up 1.7% year on year, in line with analysts' expectations. Overall, it was a very strong quarter for the company with an impressive beat of analysts' earnings estimates.
Tennant had the weakest performance against analyst estimates and slowest revenue growth among its peers. The stock is down 10.1% since reporting and currently trades at $103.97.
This content was originally published on Stock Story
