Comparing Watts Water Technologies (NYSE:WTS) & Sensata Technologies (NYSE:ST)

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

Analyst Ratings

This is a breakdown of recent ratings and price targets for Watts Water Technologies and Sensata Technologies, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Watts Water Technologies	0	4	1	0	2.20
Sensata Technologies	1	6	5	0	2.33

Watts Water Technologies currently has a consensus price target of $234.20, indicating a potential downside of 5.84%. Sensata Technologies has a consensus price target of $35.50, indicating a potential upside of 13.30%. Given Sensata Technologies’ stronger consensus rating and higher possible upside, analysts clearly believe Sensata Technologies is more favorable than Watts Water Technologies.

Institutional & Insider Ownership

95.0% of Watts Water Technologies shares are held by institutional investors. Comparatively, 99.4% of Sensata Technologies shares are held by institutional investors. 1.1% of Watts Water Technologies shares are held by company insiders. Comparatively, 0.9% of Sensata Technologies shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

Watts Water Technologies has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500. Comparatively, Sensata Technologies has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500.

Dividends

Watts Water Technologies pays an annual dividend of $2.08 per share and has a dividend yield of 0.8%. Sensata Technologies pays an annual dividend of $0.48 per share and has a dividend yield of 1.5%. Watts Water Technologies pays out 23.8% of its earnings in the form of a dividend. Sensata Technologies pays out 59.3% 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Watts Water Technologies	13.07%	17.59%	12.34%
Sensata Technologies	3.19%	17.12%	6.72%

Valuation and Earnings

This table compares Watts Water Technologies and Sensata Technologies”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Watts Water Technologies	$2.25 billion	3.69	$291.20 million	$8.73	28.49
Sensata Technologies	$3.93 billion	1.17	$128.48 million	$0.81	38.68

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

Summary

Watts Water Technologies beats Sensata Technologies on 10 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 Sensata Technologies

Sensata Technologies Holding plc develops, manufactures, and sells sensors and sensor-rich solutions, electrical protection components and systems, and other products used in mission-critical systems and applications in the United States and internationally. It operates in two segments, Performance Sensing and Sensing Solutions. The Performance Sensing segment offers pressure, temperature, and position sensors, high-voltage solutions, and other solutions used in mission-critical systems and applications, such as tire pressure monitoring, thermal management, electrical protection, regenerative braking, powertrain for engine/transmission, and exhaust management for automobiles, on-road trucks, and off-road equipment customers. The Sensing Solutions segment provides application-specific sensor and electrical protection products, such as pressure, temperature, and position sensors; motor and compressor protectors; high-voltage contactors; solid state relays; bimetal electromechanical controls; power inverters; charge controllers; battery management systems; operator controls; and power conversion systems. It serves automotive, on-road truck, construction, and original equipment manufacturers in agriculture, control, appliance, medical, energy and charging infrastructure, data/telecom, and aerospace and defense industries, as well as systems integrators, aerospace, and motor and compressor distributors. Sensata Technologies Holding plc was founded in 1916 and is headquartered in Attleboro, Massachusetts.