Watts Water Technologies (NYSE:WTS – Get Free Report) and Armstrong World Industries (NYSE:AWI – Get Free Report) are both industrials companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, analyst recommendations, valuation, profitability, earnings and dividends.
Dividends
Watts Water Technologies pays an annual dividend of $2.52 per share and has a dividend yield of 0.7%. Armstrong World Industries pays an annual dividend of $1.36 per share and has a dividend yield of 0.7%. Watts Water Technologies pays out 22.0% of its earnings in the form of a dividend. Armstrong World Industries pays out 18.6% 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 increased its dividend for 13 consecutive years and Armstrong World Industries has increased its dividend for 1 consecutive years. Armstrong World Industries is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Ratings
This is a breakdown of current ratings for Watts Water Technologies and Armstrong World Industries, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Watts Water Technologies | 0 | 6 | 5 | 0 | 2.45 |
| Armstrong World Industries | 0 | 3 | 5 | 1 | 2.78 |
Institutional and Insider Ownership
95.0% of Watts Water Technologies shares are owned by institutional investors. Comparatively, 98.9% of Armstrong World Industries shares are owned by institutional investors. 1.0% of Watts Water Technologies shares are owned by insiders. Comparatively, 1.2% of Armstrong World Industries shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Risk & Volatility
Watts Water Technologies has a beta of 1.15, meaning that its stock price is 15% more volatile than the S&P 500. Comparatively, Armstrong World Industries has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500.
Valuation & Earnings
This table compares Watts Water Technologies and Armstrong World Industries”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Watts Water Technologies | $2.68 billion | 4.79 | $340.80 million | $11.45 | 33.53 |
| Armstrong World Industries | $1.62 billion | 4.78 | $308.70 million | $7.30 | 25.09 |
Watts Water Technologies has higher revenue and earnings than Armstrong World Industries. Armstrong World Industries 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 Armstrong World Industries’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Watts Water Technologies | 14.34% | 19.16% | 13.78% |
| Armstrong World Industries | 18.60% | 37.35% | 17.06% |
Summary
Armstrong World Industries beats Watts Water Technologies on 11 of the 17 factors compared between the two stocks.
About Watts Water Technologies
Watts Water Technologies, Inc., together with its subsidiaries, supplies products and solutions that manage and conserve the flow of fluids and energy into, through, and out of buildings in the commercial, industrial, and residential markets in the Americas, Europe, the Asia-Pacific, the Middle East, and Africa. The company offers residential and commercial flow control and protection products, including backflow preventers, water pressure regulators, temperature and pressure relief valves, thermostatic mixing valves, leak detection and protection products, commercial washroom solutions, and emergency safety products and equipment for plumbing and hot water applications. It also provides heating, ventilation, and air conditioning and gas products comprising commercial 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, the company offers drainage and water re-use products, such as drainage products, engineered rainwater harvesting solutions for commercial, industrial, marine, and residential applications; connected roof drain systems; and water quality products that include point-of-use and point-of-entry water filtration, conditioning, and scale prevention systems for commercial, marine, and residential applications. The company sells its products to plumbing, heating, and mechanical wholesale distributors and dealers; original equipment manufacturers; specialty product distributors; and do-it-yourself and retail chains, as well as wholesalers and private label accounts. Watts Water Technologies, Inc. was founded in 1874 and is headquartered in North Andover, Massachusetts.
About Armstrong World Industries
Armstrong World Industries, Inc., together with its subsidiaries, engages in the design, manufacture, and sale of ceiling and wall solutions in the Americas. It operates through Mineral Fiber and Architectural Specialties segments. The company offers mineral fiber, fiberglass wool, metal, wood, felt, wood fiber, and glass-reinforced-gypsum; ceiling component products, such as ceiling perimeters and trims, as well as grid products that support drywall ceiling systems; ceilings, walls, and facades for use in commercial settings; and manufactures ceiling suspension system (grid) products. It serves commercial and residential construction markets, as well as renovation of existing buildings sectors. The company sells its products to resale distributors, ceiling system contractors, wholesalers, and retailers comprising large home centers. Armstrong World Industries, Inc. was founded in 1860 and is headquartered in Lancaster, Pennsylvania.
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