Water management solutions companies aren’t the flashiest firms out there because the products and solutions they offer tend to fly under the radar. 

That said, this doesn’t mean their offerings are unimportant. Water management systems are mission-critical infrastructure that are needed to fulfill water management requirements and public safety compliance.

One of the companies that operate in this underrated space is Zurn Elkay Water Solutions (ZWS)—a pure-play water management solutions company formed after the merger of Zurn Water Solutions and Elkay Manufacturing company in 2022.

Prior to the $1.5 billion merger, Zurn Water Solutions specialized in “behind the wall” water infrastructure (i.e, drainage, flow control, safety pipes, etc.). Meanwhile Elkay dominated “in front of the wall” consumer-facing products (sinks, fountains, bottle fillers, etc.).

At present, Zurn Elkay caters to a wide variety of markets which include education, office and retail, hospitality, multifamily, fire protection, healthcare, restaurant, residential, and government. 

To service its key markets, Zurn Elkay owns and controls a family of brands. Zurn offers engineered water solutions (plumbing, drains, FOG interceptors). The Elkay brand offers filtered bottle filling stations, water fountains, water coolers, and sinks.

Meanwhile, Wilkins specializes in water control and safety solutions, Hadrian in toilet partitions, World Dryer in hand drying solutions, and Just Manufacturing in stainless steel sinks and finished plumbing products. 

Zurn Elkay’s business mix is evenly split between new construction and retrofit, enabling it to derive revenues from equipment sales and recurring revenues from equipment such as filtration and maintenance kits. 

The 2022 merger between Zurn and Elkay combined the strengths of these two companies, enabling the combined entity to provide end-to-end water management solutions to customers. 

However, investors continue to underestimate the quality and potential of this business.

Zurn Elkay’s as-reported return on assets (“ROA”) has grown modestly from 5% in 2022 to 7% by 2025. These returns fall well below the 12% corporate average.

However, Uniform Accounting paints an entirely different story.

Instead of a below average business that’s only grown moderately in the past four years, Zurn Elkay is actually a high-return business that has managed to significantly improve over the same period.

Zurn Elkay posted a Uniform ROA of 16% in 2022. And by 2025, this has grown significantly to 40%.