Watts Water Technologies (NYSE:WTS) and Shengkai Innovations (OTCMKTS:VALV) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, earnings, risk, analyst recommendations, valuation and dividends.

Dividends

Watts Water Technologies pays an annual dividend of $0.84 per share and has a dividend yield of 1.2%. Shengkai Innovations does not pay a dividend. Watts Water Technologies pays out 27.8% of its earnings in the form of a dividend. Watts Water Technologies has increased its dividend for 5 consecutive years.

Insider & Institutional Ownership

76.1% of Watts Water Technologies shares are held by institutional investors. 1.1% of Watts Water Technologies shares are held by insiders. Comparatively, 0.2% of Shengkai Innovations shares are held 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.

Valuation & Earnings

This table compares Watts Water Technologies and Shengkai Innovations’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Watts Water Technologies $1.46 billion 1.64 $73.10 million $3.02 23.26
Shengkai Innovations N/A N/A N/A N/A N/A

Watts Water Technologies has higher revenue and earnings than Shengkai Innovations.

Volatility & Risk

Watts Water Technologies has a beta of 1.16, indicating that its stock price is 16% more volatile than the S&P 500. Comparatively, Shengkai Innovations has a beta of 1.98, indicating that its stock price is 98% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Watts Water Technologies and Shengkai Innovations, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Watts Water Technologies 0 3 4 0 2.57
Shengkai Innovations 0 0 0 0 N/A

Watts Water Technologies presently has a consensus price target of $91.25, suggesting a potential upside of 29.91%. Given Watts Water Technologies’ higher possible upside, research analysts plainly believe Watts Water Technologies is more favorable than Shengkai Innovations.

Profitability

This table compares Watts Water Technologies and Shengkai Innovations’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Watts Water Technologies 6.05% 14.43% 7.36%
Shengkai Innovations N/A N/A N/A

Summary

Watts Water Technologies beats Shengkai Innovations on 10 of the 12 factors compared between the two stocks.

Watts Water Technologies Company Profile

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.

Shengkai Innovations Company Profile

Shengkai Innovations, Inc., together with its subsidiaries, designs, manufactures, and distributes ceramic valves for industrial use in the People's Republic of China. The company provides ceramic valves in various categories, including gate, ball, back, adjustable, cut-off, and special valves. It also offers various services related to industrial ceramic valves consisting of manufacture, installation, and maintenance of general industrial ceramic valves, as well as the design and manufacture of a range of non-standard ceramic valves. The company sells its products through direct sales personnel and agents to electric power, petrochemical, chemical, aluminum, and metallurgy industries. Shengkai Innovations, Inc. also exports its products to Europe, North America, the Middle East, and the Asia-Pacific region. The company is headquartered in Tianjin, the People's Republic of China.

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