Advanced Drainage Systems vs Watts Water Technologies
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KIRA’s take AI analyst
I put Advanced Drainage Systems and Watts Water Technologies side by side, using each one’s latest annual report. Here is what stands out:
- Advanced Drainage Systems is the larger business, with $3.1B of revenue in fiscal 2026 against $2.4B for Watts Water Technologies.
- Watts Water Technologies grew revenue faster (8.3%, against 5.0%).
- Advanced Drainage Systems kept more of each dollar of sales as operating profit (20.3% operating margin, against 18.4%).
- Advanced Drainage Systems turned more of its sales into free cash flow (18.7% FCF margin, against 14.6%).
- Watts Water Technologies earned a higher return on the capital invested in it (20.5%, against 15.8%).
- Investors pay more for each dollar of Watts Water Technologies’s earnings: a P/E of 32.1x against 22.7x for Advanced Drainage Systems.
Who comes out ahead
Of the 11 measures where higher (or lower) is clearly better, how many each company leads.
Advanced Drainage Systems
WMS
3/11
Operating marginFCF marginReturn on equity
Watts Water Technologies
WTS
7/11
Revenue growth5-year growthGross marginReturn on capitalPiotroski F-scoreNet debt / EBITDAShare count change
Side by side
Best in the row
| Latest fiscal year | WMS FY26 | WTS FY25 |
|---|---|---|
| Size | ||
| Market cap | $10.1B | $12.3B |
| Revenue | $3.1B | $2.4B |
| Free cash flow | $569M | $356M |
| Net income | $427M | $341M |
| Growth | ||
| Revenue growth | 5.0% | 8.3% |
| 5-year growth | 9.0% | 10.1% |
| Share count change | 0.3% | 0.0% |
| Profitability | ||
| Gross margin | 38.3% | 49.5% |
| Operating margin | 20.3% | 18.4% |
| Net margin | 14.0% | 14.0% |
| FCF margin | 18.7% | 14.6% |
| Return on capital | 15.8% | 20.5% |
| Return on equity | 25.2% | 18.3% |
| Balance sheet | ||
| Net debt | $1.6B | −$205M |
| Net debt / EBITDA | 1.9x | −0.4x |
| Dividends and buybacks | $148M | $82.9M |
| Valuation & quality | ||
| P/E | 22.7x | 32.1x |
| Piotroski F-score | 4 | 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.