Head-To-Head Contrast: Zurn Elkay Water Solutions Cor (NYSE:ZWS) vs. Veralto (NYSE:VLTO)

Zurn Elkay Water Solutions Cor (NYSE:ZWS) and Veralto (NYSE:VLTO) are both business services companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, institutional ownership, valuation, risk, dividends, profitability and analyst recommendations.

Dividends

Zurn Elkay Water Solutions Cor pays an annual dividend of $0.36 per share and has a dividend yield of 0.8%. Veralto pays an annual dividend of $0.44 per share and has a dividend yield of 0.4%. Zurn Elkay Water Solutions Cor pays out 35.6% of its earnings in the form of a dividend. Veralto pays out 12.3% 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. Zurn Elkay Water Solutions Cor has increased its dividend for 3 consecutive years and Veralto has increased its dividend for 1 consecutive years. Zurn Elkay Water Solutions Cor is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Zurn Elkay Water Solutions Cor and Veralto”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Zurn Elkay Water Solutions Cor	$1.57 billion	4.99	$160.20 million	$1.01	46.20
Veralto	$5.36 billion	5.05	$833.00 million	$3.58	30.45

Veralto has higher revenue and earnings than Zurn Elkay Water Solutions Cor. Veralto is trading at a lower price-to-earnings ratio than Zurn Elkay Water Solutions Cor, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Zurn Elkay Water Solutions Cor has a beta of 1.07, suggesting that its share price is 7% more volatile than the S&P 500. Comparatively, Veralto has a beta of 0.91, suggesting that its share price is 9% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Zurn Elkay Water Solutions Cor and Veralto, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Zurn Elkay Water Solutions Cor	0	4	2	0	2.33
Veralto	0	4	5	0	2.56

Zurn Elkay Water Solutions Cor currently has a consensus target price of $38.50, indicating a potential downside of 17.49%. Veralto has a consensus target price of $113.43, indicating a potential upside of 4.05%. Given Veralto’s stronger consensus rating and higher probable upside, analysts clearly believe Veralto is more favorable than Zurn Elkay Water Solutions Cor.

Profitability

This table compares Zurn Elkay Water Solutions Cor and Veralto’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Zurn Elkay Water Solutions Cor	10.78%	15.23%	9.02%
Veralto	16.65%	41.45%	14.05%

Institutional & Insider Ownership

83.3% of Zurn Elkay Water Solutions Cor shares are held by institutional investors. Comparatively, 91.3% of Veralto shares are held by institutional investors. 2.6% of Zurn Elkay Water Solutions Cor shares are held by company insiders. Comparatively, 0.4% of Veralto shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Veralto beats Zurn Elkay Water Solutions Cor on 12 of the 17 factors compared between the two stocks.

About Zurn Elkay Water Solutions Cor

Zurn Elkay Water Solutions Corporation engages in design, procurement, manufacture, and marketing of water management solutions in the United States, Canada, and internationally. It offers water safety and control products, such as backflow preventers, fire system valves, pressure reducing valves, thermostatic mixing valves, PEX pipings, fittings, and installation tools under the Zurn and Wilkins brand names. The company also provides flow systems products comprising point drains, hydrants, fixture carrier systems, chemical drainage systems; and interceptors and separators, acid neutralization systems, and remote monitoring systems under the Zurn and Green Turtle brands. In addition, it develops, manufactures, and markets remote tank monitoring devices, alarms, software, and services. Further, the company offers sensor-operated flush valves under the AquaSense, Aquaflush, and AquaVantage brands; heavy-duty commercial faucets under the AquaSpec brand; water conserving fixtures under the EcoVantage and Zurn One brands; stainless steel products under the Just Manufacturing brand name, which include stainless steel sinks and plumbing fixtures, and various types of sinks, as well as drinking water dispensing and filtration products under the Elkay and Halsey Taylor brands. It distributes to institutional, commercial, waterworks, and residential end markets through independent sales representatives, plumbing wholesalers, and industry-specific distributors in the waterworks, foodservice, industrial, janitorial, sanitation, and sitework industries. The company was formerly known as Zurn Water Solutions Corporation and changed its name to Zurn Elkay Water Solutions Corporation in July 2022. Zurn Elkay Water Solutions Corporation was incorporated in 1892 and is headquartered in Milwaukee, Wisconsin.

About Veralto

Veralto Corporation provides water analytics, water treatment, marking and coding, and packaging and color services worldwide. It operates through two segments, Water Quality (WQ) and Product Quality & Innovation (PQI). The WQ segment offers precision instrumentation and water treatment technologies to measure, analyze, and treat water in residential, commercial, municipal, industrial, research, and natural resource applications through the Hach, Trojan Technologies, and ChemTreat brands. This segment provides water solutions, including chemical reagents, services, and digital solutions. The PQI segment offers inline printing solutions for products and packaging with marking and coding systems; marking and coding for packaged goods and related consumables; design software and imaging systems for the creation of new packaging designs; color management solutions for printed packages and consumer and industrial products; color standard services for the design industry; and a software solution that provides digital asset management, marketing resource management, and product information management. This segment sells its products and services through the Videojet, Linx, Esko, X-Rite, and Pantone brands to regulated industries, including municipal utilities, food and beverage, pharmaceutical, and industrials. The company was formerly known as DH EAS Holding Corp. and changed its name to Veralto Corporation in February 2023. Veralto Corporation was incorporated in 2022 and is headquartered in Waltham, Massachusetts.