Contrasting Xylem (XYL) and Its Competitors

Xylem (NYSE:XYL) is one of 436 public companies in the “Machinery” industry, but how does it compare to its peers? We will compare Xylem to similar companies based on the strength of its analyst recommendations, institutional ownership, risk, profitability, dividends, earnings and valuation.

Dividends

Xylem pays an annual dividend of $1.72 per share and has a dividend yield of 1.7%. Xylem pays out 38.1% of its earnings in the form of a dividend. As a group, “Machinery” companies pay a dividend yield of 2.8% and pay out 24.6% of their earnings in the form of a dividend. Xylem has raised its dividend for 2 consecutive years. Xylem lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Xylem and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Xylem	2	8	9	0	2.37
Xylem Competitors	4196	14696	18192	805	2.41

Xylem presently has a consensus target price of $121.31, suggesting a potential upside of 20.16%. As a group, “Machinery” companies have a potential upside of 31.64%. Given Xylem’s peers stronger consensus rating and higher possible upside, analysts clearly believe Xylem has less favorable growth aspects than its peers.

Valuation and Earnings

This table compares Xylem and its peers gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Xylem	$9.04 billion	$957.00 million	22.34
Xylem Competitors	$4.66 billion	$364.05 million	3.91

Xylem has higher revenue and earnings than its peers. Xylem is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares Xylem and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Xylem	11.94%	12.06%	7.51%
Xylem Competitors	-1,044.42%	-14.99%	0.57%

Volatility & Risk

Xylem has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500. Comparatively, Xylem’s peers have a beta of 5.11, meaning that their average stock price is 411% more volatile than the S&P 500.

Insider and Institutional Ownership

88.0% of Xylem shares are held by institutional investors. Comparatively, 51.7% of shares of all “Machinery” companies are held by institutional investors. 0.3% of Xylem shares are held by company insiders. Comparatively, 14.2% of shares of all “Machinery” companies are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Xylem peers beat Xylem on 8 of the 15 factors compared.

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.