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ZWS, Zurn Elkay Water Solutions Corporation

Industrial Machinery capital-intensive Serial acquirer

Zurn Elkay Water Solutions Corporation is a growth-oriented, pure-play water management business that designs, procures, manufactures, and markets what we believe to be the broadest sustainable product portfolio of specification-driven water management solutions to improve health, hydration, human safety and the environment.

We operate in a disciplined way and the Zurn Elkay Business System ("ZEBS"), described below, is our operating philosophy.

Grounded in the spirit of continuous improvement, ZEBS creates a scalable, process-based framework that focuses on driving superior customer satisfaction and financial results by targeting world-class operating performance throughout all aspects of our business.

Latest annual: FY2025 10-K

ZWS · Zurn Elkay Water Solutions Corporation

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$1.7B

+8.3% YoY · 18% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $1.7B 5-yr avg $1.4B

Gross margin 45% 5-yr avg 42%

Operating margin 17.1% 5-yr avg 12.9%

ROIC 12% 5-yr avg 10%

Owner-earnings margin 18%

Free cash flow margin 18%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

Situation: Serial acquirer. Goodwill and acquired intangibles are 61% of assets, with meaningful acquisition spending in 4 of the record's 10 years; much of what this business is was bought, at prices the record carries.
What moves the needle: Gross margin has run about 38% and operating margin about 13% through the cycle, a solid spread between what it charges and what the product costs to make. Inventory runs near 17% of sales, so how fast it turns back into cash — and the risk of writing it down when demand softens — sits alongside the margin. Read this kind of business on the capital-goods cycle and the aftermarket. On its own account, the filing leans hardest on customer concentration, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has sat near the cost of capital (median 7%). By owner earnings: roughly 10% of revenue reaches owners as cash, consistently. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

The record

Ten years of arithmetic, read across the cycle.

The record, 2016–2025

realized figures from each filing · older years to the left

2016’16	2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMMar 2026
											Income statement
$1.9B	$1.7B	$1.9B	$2.1B	$746M	$911M	$1.3B	$1.5B	$1.6B	$1.7B	$1.7B	RevenueRevenue
35%	37%	38%	38%	45%	41%	36%	42%	45%	45%	45%	Gross marginGross mgn
20%	21%	21%	21%	28%	26%	24%	24%	25%	25%	24%	SG&A / revenueSG&A/rev
1%	1%	1%	1%	2%	—	—	—	—	—	1%	R&D / revenueR&D/rev
$174M	$203M	$266M	$306M	$108M	$107M	$107M	$191M	$245M	$279M	$298M	Operating incomeOp. inc.
9.1%	11.9%	14.4%	14.9%	14.4%	11.7%	8.4%	12.5%	15.6%	16.4%	17.1%	Operating marginOp. mgn
$68M	$74M	$76M	$34M	$147M	$121M	$62M	$113M	$160M	$198M	$213M	Net incomeNet inc.
20%	17%	—	—	6%	2%	30%	27%	23%	24%	24%	Effective tax rateTax rate
											Cash flow & returns
$219M	$195M	$229M	$258M	$320M	$224M	$97M	$254M	$294M	$347M	$350M	Operating cash flowOp. cash
$115M	$96M	$80M	$88M	$87M	$44M	$21M	$29M	$29M	$30M	$28M	DepreciationDeprec.
$28M	$12M	$52M	$113M	$42M	$7M	($10M)	$72M	$66M	$78M	$66M	Working capital & otherWC & other
$52M	$51M	$38M	$43M	$41M	—	—	—	—	—	$41M	CapexCapex
2.7%	3.0%	2.1%	2.1%	5.5%	—	—	—	—	—	2.4%	Capex / revenueCapex/rev
$167M	$144M	$191M	$216M	$279M	—	—	—	—	—	$308M	Owner earningsOwner earn.
8.7%	8.4%	10.3%	10.5%	37.4%	—	—	—	—	—	17.7%	Owner earnings marginOE mgn
$167M	$144M	$191M	$216M	$279M	—	—	—	—	—	$308M	Free cash flowFCF
8.7%	8.4%	10.3%	10.5%	37.4%	—	—	—	—	—	17.7%	Free cash flow marginFCF mgn
$0	$214M	$174M	$23M	$161M	$17M	$45M	$0	$0	—	$0	AcquisitionsAcquis.
—	—	$0	$0	$39M	$36M	$33M	$50M	$57M	$64M	$67M	Dividends paidDiv. paid
$40M	$0	$0	$0	$140M	$900K	$25M	$125M	$150M	$160M	—	BuybacksBuybacks
7%	8%	—	—	4%	18%	4%	7%	10%	12%	12%	ROICROIC
12%	7%	6%	3%	10%	96%	4%	7%	10%	12%	13%	Return on equityROE
—	—	6%	3%	8%	67%	2%	4%	7%	8%	9%	Retained to equityRetained/eq
											Balance sheet
$485M	$490M	$193M	$293M	$62M	$97M	$125M	$137M	$198M	$301M	$274M	Cash & investmentsCash+inv
$318M	$323M	$315M	$334M	$104M	$144M	$220M	$210M	$202M	$185M	$243M	ReceivablesReceiv.
$327M	$315M	$304M	$317M	$136M	$185M	$367M	$278M	$273M	$274M	$292M	InventoryInvent.
$201M	$198M	$190M	$192M	$41M	$105M	$117M	$56M	$72M	$65M	$99M	Accounts payablePayables
$444M	$440M	$429M	$459M	$198M	$224M	$470M	$431M	$403M	$394M	$436M	Operating working capitalOper. WC
$1.2B	$1.2B	$998M	$983M	$908M	$475M	$758M	$668M	$722M	$812M	$837M	Current assetsCur. assets
$404M	$400M	$454M	$397M	$318M	$240M	$289M	$221M	$248M	$259M	$259M	Current liabilitiesCur. liab.
2.9×	2.9×	2.2×	2.5×	2.9×	2.0×	2.6×	3.0×	2.9×	3.1×	3.2×	Current ratioCurr. ratio
$1.2B	$1.2B	$1.3B	$1.3B	$245M	$254M	$777M	$796M	$794M	$795M	$794M	GoodwillGoodwill
$3.4B	$3.5B	$3.4B	$3.3B	$3.4B	$1.1B	$2.9B	$2.7B	$2.6B	$2.7B	$2.7B	Total assetsAssets
$1.9B	$1.6B	$1.4B	$1.2B	$1.1B	$540M	$536M	$495M	$496M	$497M	$499M	Total debtDebt
$1.4B	$1.1B	$1.2B	$946M	$1.1B	$443M	$411M	$359M	$298M	$196M	$226M	Net debt / (cash)Net debt
1.9×	2.3×	3.5×	4.4×	2.3×	3.1×	4.0×	5.0×	7.4×	9.8×	10.8×	Interest coverageInt. cov.
$589M	$1.1B	$1.2B	$1.2B	$1.4B	$126M	$1.6B	$1.6B	$1.6B	$1.6B	$1.6B	Shareholders’ equityEquity
0.4%	0.8%	1.1%	1.1%	6.0%	5.6%	2.0%	2.6%	2.4%	2.4%	2.4%	Stock comp / revenueSBC/rev
											Per share
103M	105M	122M	123M	123M	125M	154M	177M	175M	171M	170M	Shares out (diluted)Shares
$18.62	$16.34	$15.18	$16.63	$6.04	$7.28	$8.33	$8.63	$8.97	$9.90	$10.26	Revenue / shareRev/sh
$0.66	$0.71	$0.62	$0.28	$1.19	$0.97	$0.40	$0.64	$0.92	$1.16	$1.26	EPS (diluted)EPS
$1.62	$1.38	$1.56	$1.75	$2.26	—	—	—	—	—	$1.82	Owner earnings / shareOE/sh
$1.62	$1.38	$1.56	$1.75	$2.26	—	—	—	—	—	$1.82	Free cash flow / shareFCF/sh
—	—	$0.00	$0.00	$0.31	$0.29	$0.21	$0.28	$0.32	$0.37	$0.40	Dividends / shareDiv/sh
$0.50	$0.48	$0.31	$0.34	$0.34	—	—	—	—	—	$0.24	Cap. spending / shareCapex/sh
$5.70	$10.22	$9.94	$9.96	$11.66	$1.01	$10.50	$9.04	$9.09	$9.36	$9.47	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	9-yr	5-yr
Revenue / share	−6.8%/yr	+10.4%/yr
Owner earnings / share	+8.7%/yr (4-yr)	+8.7%/yr (4-yr)
EPS	+6.5%/yr	−0.5%/yr
Dividends / share	—	+3.6%/yr
Capital spending / share	−9.7%/yr (4-yr)	−9.7%/yr (4-yr)
Book value / share	+5.7%/yr	−4.3%/yr

The record, charted

FY2016–2025

Each measure over its full record; the current point and the worst year marked.

Share count

171Mpeak FY2023

ROIC

12%low FY2022

Gross margin

45%low FY2016

Net debt ÷ owner earnings

3.8×peak FY2016

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$279Mowner earningsvs.$147Mnet incomelow FY2017

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2016FY2025

Owner-earnings bridge

FY2016–FY2020cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2020 the business turned $147M of profit into $279M of owner earnings: more cash than the profit line showed, after the non-cash charges and the capital it put back in.

Reported net income$147M

Owner earnings$279M · 37% of revenue

	FY2020	FY2019	FY2018	FY2017	FY2016
Reported net income	$147M	$34M	$76M	$74M	$68M
Depreciation & amortizationnon-cash charge added back	+$87M	+$88M	+$80M	+$96M	+$115M
Stock-based compensationreal costnon-cash, but a real cost	+$45M	+$23M	+$21M	+$13M	+$8M
Working capital & othertiming of cash in and out, other non-cash items	+$42M	+$113M	+$52M	+$12M	+$28M
Cash from operations	$320M	$258M	$229M	$195M	$219M
Capital expenditurecash put back in to keep running and to grow	−$41M	−$43M	−$38M	−$51M	−$52M
Owner earnings	$279M	$216M	$191M	$144M	$167M
Owner-earnings marginowner earnings ÷ revenue	37%	11%	10%	8%	9%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $45M), owner earnings is nearer $234M.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? 9.8×

Comfortable

Operating income $279M ÷ interest expense $29M

What this means
Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient, it says solvent, not cheap.
How heavy is the debt, net of cash? $196M · 0.7× operating profit

Modest net debt

Cash $301M − debt $497M

What this means
Netting $301M of cash and short-term investments against $497M of debt leaves $196M owed, about 0.7× a year's operating profit (1.8× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? 122d

Long (60+ days)

DSO 40 + DIO 108 − DPO 26 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.

Is it a good business?

Return on invested capital 7%

Below average through the cycle

8-yr median, range 4%–18%; 12% latest = NOPAT $211M ÷ invested capital $1.8B

Industry peers: median 11%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 8 years (it ran 12% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 10%

Solid through the cycle

5-yr median margin, range 8%–37%; latest $305M = operating cash $347M − maintenance capex $41M

Industry peers: median 15%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 18% of revenue this year, a 10% median across 5 years. Treating stock comp as the real expense it is (less $41M of SBC) leaves $265M.
Are earnings backed by cash? 1.75×

Cash-backed

Cash from ops $347M ÷ net income $198M

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? 73%

Returns about half

Dividends + buybacks $224M ÷ Owner Earnings $305M

What this means
Of $305M Owner Earnings, $224M (73%) went back to shareholders, $64M dividends, $160M buybacks. Net of $41M stock comp, the real buyback was about $119M. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
Investing or harvesting? 1.38×

Expanding

Capex $41M ÷ depreciation $30M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 4 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Near

Revenue ≥ $2B · $1.7B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Pass

Current ratio ≥ 2× · 3.13×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Pass

Debt ≤ working capital · $497M vs $552M WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Pass

A profit every year (10-yr record) · no losses

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Miss

Uninterrupted dividends · 6 of 10 yrs

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Pass

Earnings +33% over the record · +116%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $0.94/share (latest year $1.19), the averaged base the calculator's gate runs on, and book value is $9.61/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 10 of 10

What this means
Never lost money over the record, the earnings stability Graham insisted on.
Return on capital ≥ 15% 1 of 10 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 12% → 15% (3-yr avg ends)

What this means
Through the cycle the operating margin widened — about 12% early to 15% lately, median 13% — pricing power intact or improving.
Reinvestment, incremental ROIC returns capital

What this means
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
Owner earnings growth +12%/yr

What this means
Owner earnings grew about 12% a year over the record.
Worst year 2022 · 8.4% op. margin

What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.
Share count +5.8%/yr

What this means
The share count is rising, dilution works against you on a per-share basis.
Dividend record rising

What this means
Paid and raised the dividend across the record, the continuity Graham prized.

Does AI threaten the moat?

Low contestability

The moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.

In its own filing A competitive risk, new this year

Its FY2025 10-K names artificial intelligence as a competitive threat, in language that was not in the prior year's filing.

“Our ongoing success depends on our ability to continue to meet our customers' changing specifications with respect to these criteria. 11 We cannot ensure that we will be able to introduce new products that may be necessary to remain competitive within our businesses or to effectively adopt technological advances, inclu…”

AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Mar 31, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$837M

Cash & short-term investments$274M
Receivables$243M
Inventory$292M
Other current assets$28M

Current liabilities$259M

Debt due within a year$1M
Accounts payable$99M
Other current liabilities$158M

Current ratio3.24×all current assets ÷ what's due · Graham looked for 2×

Quick ratio2.11×stricter: inventory excluded

Cash ratio1.06×strictest: cash alone against what's due

Working capital$578Mthe cushion left after near-term bills

Debt due this year vs. cash$1M due · $274M cash covered by cash on hand, no refinancing forced · both figures from the Mar 31, 2026 balance sheet

Revenue, latest quarter vs. a year ago+11.4%the freshest read on whether the business is still growing

Current ratio, recent quarters2.8× → 3.2×

Deeper floors

Tangible book value($8M)equity stripped of goodwill & intangibles

Net current asset value($241M)Graham's net-net: current assets less all liabilities

Debt incl. operating leases$552M$53M of it operating leases

Deferred revenue$5Mcustomer cash collected before delivery; operating float

From the company's latest filing.

Debt maturity

the debt note, SEC EDGAR →

Not how much it owes, but when it falls due, and against what. The ladder the company files, beside cash on hand and a year's owner earnings.

'26$900K

'27$1M

'28$482M

'29$1M

'30$1M

later$14M

Bars scaled to the largest single year; “later” is everything due after 2030, shown apart since it dwarfs the years.

Due in the next 12 months$900Kthe first rung: what must be repaid or rolled over within the year

Within two years$2Mthe near wall, the part most exposed to today’s credit conditions

Biggest single year$482Min 2028the lumpiest maturity, where a refinancing, if needed, is largest

Total scheduled principal$500Mevery year plus what lies beyond, as the footnote totals it

Against what the business has and earns

Cash & short-term investments, Mar 31, 2026$274M

One year of owner earnings (FY2025)$305M

Together, against $900K due next year642.9×

Cash on hand as of Mar 31, 2026 plus a year’s owner earnings comes to $579M against the $900K due in the twelve months after the Dec 31, 2025 schedule: 643 times it.

Maturity schedule extracted from the company’s Dec 31, 2025 annual report and reconciled to the balance-sheet debt.

How the cash was used, 2016–2020

Over the record, the business generated $1.2B of operating cash; how management split it reads as a deleverager, a meaningful share of cash went to paying down debt.

Reinvested$225M · 18%
Dividends$39M · 3%
Buybacks$180M · 15%
Retained (debt / cash)$778M · 64%

Returned to owners$219M
22% of the owner earnings the business produced over the span, $39M as dividends and $180M as buybacks.
Source of fundingOperating cash
Operating cash covered reinvestment and returns; over the span debt fell $1.4B and cash and short-term investments fell $211M.
Average price paid for buybacks$34.93
Across the years where the filing reports a share count, 5M shares were bought for $180M, about $34.93 each.
Net change in share count64.2%
The diluted count rose from 103M to 170M: issuance (stock pay, deals) outran any buybacks, so owners were diluted on net.
Dividend record$0.31/sh
Paid in 1 of the years on record. It was never cut over the span.
Return on what it retained34%
Of the earnings it kept rather than paid out ($180M over the span), annual owner earnings (first three years vs last three) grew $61M, so each retained $1 added about 0.34 of yearly owner earnings. Buffett's test, run on owner earnings instead of market value.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Acquisitions & goodwill

from the balance sheet & the 10-year cash-flow record

Goodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.

Goodwill & intangibles$1.6B61% of all assets; the premium carried on the balance sheet for businesses acquired

Against book equity50%goodwill is this share of book equity; the rest is the company’s own retained and paid-in capital

Cash spent acquiring$635Mover 10 years buying other businesses, against $225M of capital spent building

$237M written down across 2 years (2018, 2019): goodwill the company has already conceded it overpaid for, charged against earnings. That is roughly 37% of the cash it put into acquisitions over the span. A write-down costs no cash (the cash went out when the deal was signed), but it is management marking its own past judgment to market.

Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 10-year record, from the company's own filings.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Net income
2021	Mr. Adams	$16.8M	$56.8M	$121M
2022	Mr. Adams	$1.4M	−$5.9M	$62M
2023	Mr. Adams	$9.9M	$17.8M	$113M
2024	Mr. Adams	$11.2M	$18.4M	$160M
2025	Mr. Adams	$11.6M	$19.1M	$198M

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Net income is the whole business's, as filed, for the same fiscal years.

Insider ownership2.4%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
Stock-based compensation$41M
The slice of the business handed to employees in shares this year, 2% of revenue, equal to 15% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why Zurn Elkay Water Solutions Corporation is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2016–2025.

2 of the 6 tests turned up something to look into; the other 4 came back clean.

Look hereDid the share count rise anyway?64.2%
Diluted shares grew 64.2% over 2016–2020, even as the company spent $180M on buybacks. The repurchases were outrun by issuance — to staff, in a raise, or in a deal — and the filing says which; owners' slice still shrank. Read the buyback line beside this one, not on its own.
Look hereAre "one-time" charges a yearly habit?7 of 10 years
Management took an impairment or write-down in 7 of the last 10 years, $269M in all. Taken across the majority of the record, the "one-time" label is wearing thin — ask whether these are past deals coming due rather than genuinely isolated events. Read it beside the goodwill the company still carries.

And these came back clean

Is it less profitable than it was?
Did debt outgrow the business?
Did reported profit become cash?
Did receivables and inventory outpace sales?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

Peers, Industrial Machinery

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
ZBRAZebra Technologies	$5.4B	47%	13.7%	13%	15%
GTESGates Industrial	$3.4B	39%	12.9%	7%	9%
ESABEsab Corporation	$2.8B	36%	13.6%	10%	10%
NDSNNordson Corporation	$2.8B	55%	23.8%	13%	19%
SYMSymbotic Inc.	$2.2B	15%	-21.3%	—	-4%
GGGGraco Inc.	$2.2B	53%	26.6%	32%	20%
RBCRBC Bearings	$1.9B	40%	19.5%	8%	15%
ZWSZurn Elkay Water Solutions Corporation	$1.7B	40%	13.4%	7%	10%
Group median	—	40%	13.7%	10%	12%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Zurn Elkay Water Solutions Corporation has delivered.

Zurn Elkay Water Solutions Corporation’s latest year runs above its own through-cycle margin — the reported figure may flatter a peak. So the tool opens on the through-cycle base, Graham’s averaging cutting both ways; clear the toggle below to read the latest year exactly as reported.

Today’s price $

Through the cycle, Zurn Elkay Water Solutions Corporation earns about $176M on its 10.4% median owner-earnings margin. This year’s 18.0% margin runs above that; the reported figure may flatter a peak you'd be paying on. Normalize, below, values the price on that through-cycle figure rather than the latest year. It comes pre-checked here for that reason, the same rule that already normalizes a trough; clear it to price the year as filed.

Base Normalize · through-cycle ($176M) Net of stock comp (−$42M)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’16→’20+12%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Owner earnings $308M on 167M shares outstanding, per the 10-Q cover, as of 2026-04-16; net debt $226M. The base opens on the through-cycle figure (the latest year sits above the record’s own median, and Graham’s averaging cuts both ways); clear Normalize to use the year as filed. Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh ZWS against another business →

Cite: Owner Scorecard, "Zurn Elkay Water Solutions Corporation (ZWS), the owner's record," https://ownerscorecard.com/c/ZWS, data as of 2026-07-09.

Manual order: ← ZVRA its page in the Manual ZYME →

Industry order: ← ZOOZ the Industrial Machinery chapter