Stock of the Day

August 26, 2020

Xylem (XYL)

$127.32
-$2.41 (-1.9%)
Market Cap: $31.52B

About Xylem

Xylem Inc., together with its subsidiaries, engages in the design, manufacture, and servicing of engineered products and solutions worldwide. It operates through four segments: Water Infrastructure, Applied Water, Measurement & Control Solutions, and Integrated Solutions and Services. The Water Infrastructure segment offers products, including water, storm water, and wastewater pumps; controls and systems; filtration, disinfection, and biological treatment equipment; and mobile dewatering equipment and rental services under the ADI, Flygt, Godwin, Sanitaire, Magneto, Neptune Benson, Ionpure, Leopold, Wedeco, and Xylem Vue brands. The Applied Water segment provides pumps, valves, heat exchangers, controls, and dispensing equipment systems under the Goulds Water Technology, Bell & Gossett, A-C Fire Pump, Standard Xchange, Lowara, Jabsco, Xylem Vue, and Flojet brands. The Measurement & Control Solutions segment offers smart meters, networked communication devices, data analytics, test equipment, controls, sensor devices, software and managed services, and critical infrastructure services; and software and services, including cloud-based analytics, remote monitoring and data management, leak detection, condition assessment, asset management, and pressure monitoring solutions, as well as testing equipment. This segment sells its products under the Pure Technologies, Sensus, Smith Blair, WTW, Xylem Vue, and YSI brands. The Integrated Solutions and Services segment provides maintenance services, mobile services, digital outsourced solutions, wastewater systems, environmental remediation, odor and corrosion control, filtration, reverse osmosis, ion exchange, and deionization under Aquapro, WaterOne, and Ion Pure brands. Xylem Inc. was formerly known as ITT WCO, Inc. and changed its name to Xylem Inc. in May 2011. Xylem Inc. was incorporated in 2011 and is headquartered in Washington, District of Columbia.

Xylem Bull Case

Here are some ways that investors could benefit from investing in Xylem Inc.:

  • Xylem Inc. recently reported earnings per share (EPS) of $1.18, exceeding the consensus estimate of $1.12, indicating strong financial performance and effective management.
  • The company has increased its quarterly dividend from $0.36 to $0.40 per share, reflecting a commitment to returning value to shareholders and a healthy dividend yield of approximately 1.23%.
  • With a current stock price of $130.28, Xylem Inc. is trading below the consensus target price of $149.90, suggesting potential for price appreciation.
  • Analysts have a consensus rating of "Moderate Buy" for Xylem Inc., with seven analysts issuing buy ratings, indicating positive sentiment in the market.
  • The company has shown a year-over-year revenue increase of 8.6%, demonstrating growth and resilience in its business operations.

Xylem Bear Case

Investors should be bearish about investing in Xylem Inc. for these reasons:

  • TD Cowen recently lowered their price target for Xylem Inc. from $138.00 to $125.00, which may indicate concerns about future performance.
  • The stock has a relatively high price-to-earnings (P/E) ratio of 35.60, suggesting that it may be overvalued compared to its earnings, which could deter value-focused investors.
  • Despite the positive earnings report, the company has a beta of 1.07, indicating that its stock price is slightly more volatile than the market, which could pose risks for conservative investors.
  • Four analysts have rated the stock with a hold rating, suggesting that there may be uncertainty about its future growth potential.
  • The debt-to-equity ratio of 0.19, while relatively low, indicates that the company is using some leverage, which could be a concern if interest rates rise or if the company faces financial challenges.

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