Trex vs Watts Water Technologies
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KIRA’s take AI analyst
I put Trex and Watts Water Technologies side by side, using each one’s latest annual report. Here is what stands out:
- Watts Water Technologies is the larger business, with $2.4B of revenue in fiscal 2025 against $1.2B for Trex, about 2.1 times as much.
- Watts Water Technologies grew revenue faster (8.3%, against 2.0%).
- Trex kept more of each dollar of sales as operating profit (22.0% operating margin, against 18.4%).
- Watts Water Technologies turned more of its sales into free cash flow (14.6% FCF margin, against 11.5%).
- Investors pay more for each dollar of Watts Water Technologies’s earnings: a P/E of 32.1x against 29.8x for Trex.
Who comes out ahead
Of the 8 measures where higher (or lower) is clearly better, how many each company leads.
Trex
TREX
4/8
Operating marginNet marginReturn on equityShare count change
Watts Water Technologies
WTS
4/8
Revenue growth5-year growthGross marginFCF margin
Side by side
Best in the row
| Latest fiscal year | TREX FY25 | WTS FY25 |
|---|---|---|
| Size | ||
| Market cap | $5.2B | $12.3B |
| Revenue | $1.2B | $2.4B |
| Free cash flow | $135M | $356M |
| Net income | $190M | $341M |
| Growth | ||
| Revenue growth | 2.0% | 8.3% |
| 5-year growth | 5.9% | 10.1% |
| Share count change | −1.1% | 0.0% |
| Profitability | ||
| Gross margin | 39.2% | 49.5% |
| Operating margin | 22.0% | 18.4% |
| Net margin | 16.2% | 14.0% |
| FCF margin | 11.5% | 14.6% |
| Return on capital | — | 20.5% |
| Return on equity | 19.8% | 18.3% |
| Balance sheet | ||
| Net debt | — | −$205M |
| Net debt / EBITDA | — | −0.4x |
| Dividends and buybacks | $54.5M | $82.9M |
| Valuation & quality | ||
| P/E | 29.8x | 32.1x |
| Piotroski F-score | — | 8 |
Ten years
Revenue
Operating margin
Free cash flow
Return on capital
Each company's latest fiscal year; fiscal years end in different months. The best value in each row is highlighted where higher (or lower) is clearly better. Not investment advice.