Research · Sep 3, 2026
[ZWS] Zurn Elkay Water Solutions Thesis 2026: Plumbing Drinking Water Drives Specialty Capital Return
Zurn Elkay Water Solutions Corporation (NYSE: ZWS) FY2025 revenue ~$1.55-1.65B (+2-5%) with adj. EPS ~$1.55-1.70 reflecting continued post-July 2022 Zurn-Elkay merger ~$1.55-1.65B aggregate Plumbing Products + Drinking Water Solutions revenue (~$0.95-1.0B aggregate Plumbing Products + ~$0.55-0.60B aggregate Drinking Water Solutions + ~$0.05-0.10B aggregate Other) under continued Chairman + CEO Todd Adams since 2018 (~7-year tenure as Zurn Elkay CEO; selected primary post-July 2022 Zurn-Elkay merger of equals architect). One of the largest US specialty Plumbing Products + Drinking Water Solutions companies. Founded 1900 as Zurn Industries by John A. Zurn in Erie Pennsylvania (~125-year heritage); selected post-2008-2021 Apollo Global Management ownership; selected post-October 2021 ~$1.6B+ Rexnord Process & Motion Control divestiture (post-October 2021 Zurn Water Solutions standalone NYSE listing via Rexnord-Zurn separation); selected post-July 2022 ~$2.4B+ Zurn-Elkay Water Solutions merger of equals (~62%/38% Zurn/Elkay); selected post-2018 Todd Adams CEO appointment. Headquartered in Milwaukee Wisconsin; ~2,500-3,000 employees globally with global Plumbing + Drinking Water Solutions manufacturing footprint (Erie Pennsylvania + Milwaukee Wisconsin + selected various aggregate North America). One primary business: Plumbing Products + Drinking Water Solutions ~100%. Structure: Plumbing Products ~62%+ ($0.95-1.0B), Drinking Water Solutions ~36%+ ($0.55-0.60B), Other ~3-7% ($0.05-0.10B). Geographic mix: North America ~95%+ + selected various aggregate international ~5%. Plumbing Products + Specification + Commercial pipeline (~$0.95-1.0B): ~$0.95-1.0B aggregate Plumbing Products revenue (~62%+ revenue mix); selected primary Zurn brand Specification + Commercial + Institutional Plumbing (Drains + Trench Drains + Backwater Valves + PEX + Water Heaters + Ball Valves + Trap Primers + Water Filters + Wilkins backflow); selected ~80%+ Specification + Commercial mix; selected Education + Healthcare + Hospitality + Office + Industrial end-market exposure; selected ~$1.5-2.5B North American Specification Plumbing TAM. Drinking Water Solutions + Elkay + Filtration pipeline: selected continued post-July 2022 Drinking Water Solutions ~$0.55-0.60B revenue (~36%+ revenue mix; Elkay brand Bottle Filling Stations + Water Coolers + Water Filtration + Stainless Steel Sinks); selected post-July 2022 Elkay Education + Healthcare + Office + Hospitality end-market exposure; selected ~$1.0-1.5B North American Drinking Water Solutions TAM. Chairman + CEO Todd Adams since 2018 (~7-year tenure); CFO David Pauli. Capital position: ~$0.40 aggregate annual dividend (~24%+ aggregate payout ratio; ~1.0-1.4% aggregate dividend yield); ~$100-200M aggregate FY2025 buybacks; aggregate capital return ~$170-275M FY2025; net leverage ~1.5-2.0x Net Debt/EBITDA; investment-grade Baa3/BBB- credit rating; ~165-170M diluted shares; weighted average debt maturity ~5-6 years. FY2026 thesis: Plumbing Products + Specification + Commercial pipeline + Drinking Water Solutions + Elkay + Filtration pipeline + ~$1.5-2.5B North American Specification Plumbing TAM + post-July 2022 Zurn-Elkay merger cost synergies (~$50-65M run-rate). Risks: Watts Water Technologies + Mueller Industries + A. O. Smith + Roper Technologies + Masco + Fortune Brands + Halsey Taylor competitive displacement + Federal Reserve interest rate cycle considerations + Education + Healthcare + Hospitality + Office + Industrial end-market cycle considerations + post-July 2022 Elkay integration considerations + post-October 2021 Zurn-Rexnord separation overhang considerations + Stainless Steel commodity cycle considerations.