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KMT vs WTS
Which Stock Would AI Choose? Kennametal (KMT) vs. Watts Water Technologies (WTS) Stock Comparison
Key Takeaways
- KMT (Kennametal) is an industrial tooling and materials-science leader whose results have been supercharged by historically high tungsten prices, producing sharp margin expansion but also free cash flow strain.
- WTS (Watts Water Technologies) is a water-efficiency and fluid-control specialist benefiting from accelerating data center cooling demand, which more than tripled year over year in its latest quarter.
- Both stocks delivered strong trailing-year returns, but their recent price paths diverged: WTS has sustained upward momentum, while KMT has cooled over the past 90 days despite strong earnings.
- KMT's growth is tied to a cyclical, commodity-linked pricing tailwind, whereas WTS leans on a structural, secular demand theme with a large repair-and-replacement revenue base.
- Relative performance and market positioning favor WTS on trend consistency, while KMT offers a more valuation-sensitive, catalyst-driven profile.
Introduction
Investors comparing KMT and WTS are weighing two very different industrial growth stories. Kennametal is a Pittsburgh-based tooling and wear-solutions maker riding a commodity-driven pricing surge in tungsten, while Watts Water Technologies is a water-solutions provider capitalizing on the buildout of AI data centers. This stock comparison is relevant for traders seeking to assess relative performance, market positioning, and momentum across two mid-to-large-cap industrials. Both companies have produced compelling results in recent quarters, yet their risk profiles and catalysts differ materially, making the head-to-head useful for investors weighing cyclical pricing power against secular, infrastructure-linked demand.
KMT Overview and Recent Performance
Kennametal, an industrial technology company with more than 85 years of history, delivers materials-science, tooling, and wear-resistant solutions to aerospace and defense, earthworks, energy, general engineering, and transportation customers. In recent weeks, the company's performance has been defined by elevated tungsten costs. Management responded with aggressive pricing actions and tariff surcharges, which drove a record fourth quarter for fiscal 2026: organic sales rose 42% and adjusted earnings per share (EPS) reached a record $2.96, while adjusted EBITDA margin (earnings before interest, taxes, depreciation, and amortization) expanded dramatically.
The same tailwind created a trade-off. Surging tungsten values inflated inventory balances and required supplier advances, pushing fiscal 2026 free cash flow negative. The shares have reflected this tension, posting a strong one-year total return of roughly 51% but a double-digit decline over the trailing 90 days as investors reassess execution and cash-flow risk. Looking ahead, Kennametal guided to fiscal 2027 adjusted EPS of $4.15 to $5.15, contingent on tungsten prices remaining stable.
WTS Overview and Recent Performance
Watts Water Technologies designs and manufactures products that control the efficiency, safety, and quality of water across residential, commercial, and institutional applications. Recent market activity has centered on the company's fast-growing data center franchise. In its latest reported quarter, data center sales more than tripled year over year, reaching 8% of total revenue for the first half of 2026, supported by cooling products such as its CoolVault thermal storage tanks. This helped drive record quarterly sales, operating income, and EPS, with net sales up roughly 19% and adjusted EPS up 18%.
Management raised its full-year outlook, now projecting reported sales growth of 14% to 17% and organic growth of 8% to 11%. The company also lifted its dividend by 21% and continues to benefit from a durable base: approximately 60% of sales come from repair-and-replacement activity. That stability, combined with data center momentum, has supported a share price up roughly 40% year to date and more than 50% over the trailing year, with steadier recent performance than many industrial peers.
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Head-to-Head Comparison
The clearest contrast between these two names is the nature of their growth drivers. KMT is enjoying a cyclical, commodity-linked profit surge driven by tungsten pricing. That has produced exceptional near-term margins, but it introduces volatility, working-capital pressure, and the risk that margins normalize if raw-material prices retreat. In contrast, WTS is anchored in a structural theme—AI-driven data center cooling—layered on a defensive repair-and-replacement revenue base, which supports more consistent demand and cash generation.
Risk profiles also differ. Kennametal carries exposure to tungsten supply dynamics, tariff policy, and softer transportation and coal end markets, while Watts Water faces acquisition-related margin dilution, tariff impacts, and residential construction softness. On market sentiment and momentum, WTS has shown steadier relative performance and rising analyst price targets, whereas KMT's strong earnings have been partly offset by cash-flow concerns and a recent pullback. For investors, the trade-off is between a cheaper, catalyst-heavy cyclical turnaround and a higher-multiple, secular growth compounder.
Tickeron AI Verdict
Based on observable factors, Tickeron's AI would likely favor WTS in the current environment. Its signal set points to more consistent trend strength, a steadier recent price trajectory, and a structural catalyst in data center cooling that is less dependent on a single commodity price. While KMT presents a compelling valuation and earnings-acceleration story, its momentum has been more erratic and its performance is more tightly linked to tungsten pricing and cash-flow normalization. Accordingly, the AI's preference leans toward WTS for trend consistency and relative positioning, while acknowledging that KMT could regain favor if its working-capital dynamics improve and its pricing tailwind persists.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
To compare these two companies we present long-term analysis, their fundamental ratings and make comparative short-term technical analysis which are presented below. The conclusion is KMT is a Hold and WTS is a Buy.
KMT sees MACD Histogram just turned negative
KMT saw its Moving Average Convergence Divergence Histogram (MACD) turn negative on October 14, 2026. This is a bearish signal that suggests the stock could decline going forward. Tickeron's A.I.dvisor looked at 52 instances where the indicator turned negative. In 35 of the 52 cases the stock moved lower in the days that followed. This puts the odds of a downward move at 67%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The 10-day RSI Indicator for KMT moved out of overbought territory on October 07, 2026. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 31 similar instances where the indicator moved out of overbought territory. In 20 of the 31 cases, the stock moved lower in the following days. This puts the odds of a move lower at 65%.
The Momentum Indicator moved below the 0 level on October 15, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on KMT as a result. In 58 of 92 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 63%.
KMT moved below its 50-day moving average on October 22, 2026 date and that indicates a change from an upward trend to a downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where KMT declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 64%.
Bullish Trend Analysis
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. 41 of 62 cases where KMT's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 66%.
The 10-day moving average for KMT crossed bullishly above the 50-day moving average on October 05, 2026. This indicates that the trend has shifted higher and could be considered a buy signal. In 8 of 16 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 50%.
Following a +2.48% 3-day Advance, the price is estimated to grow further. Considering data from situations where KMT advanced for three days, in 195 of 310 cases, the price rose further within the following month. The odds of a continued upward trend are 63%.
KMT may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
The Aroon Indicator entered an Uptrend today. In 113 of 179 cases where KMT Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 63%.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is 40 (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Valuation Rating of 42 (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.514) is normal, around the industry mean (3.160). KMT has a moderately low P/E Ratio (6.929) as compared to the industry average of (22.360). KMT's Projected Growth (PEG Ratio) (0.050) is slightly lower than the industry average of (1.020). Dividend Yield (0.026) settles around the average of (0.017) among similar stocks. P/S Ratio (0.976) is also within normal values, averaging (2.217).
The Tickeron Price Growth Rating for this company is 51 (best 1 - 100 worst), indicating fairly steady price growth. KMT’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is 94 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. KMT’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 70, placing this stock worse than average.
Momentum Indicator for WTS turns positive, indicating new upward trend
WTS saw its Momentum Indicator move above the 0 level on October 21, 2026. This is an indication that the stock could be shifting in to a new upward move. Traders may want to consider buying the stock or buying call options. Tickeron's A.I.dvisor looked at 86 similar instances where the indicator turned positive. In 58 of the 86 cases, the stock moved higher in the following days. The odds of a move higher are at 67%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Moving Average Convergence Divergence (MACD) for WTS just turned positive on October 16, 2026. Looking at past instances where WTS's MACD turned positive, the stock continued to rise in 27 of 41 cases over the following month. The odds of a continued upward trend are 66%.
Following a +1.79% 3-day Advance, the price is estimated to grow further. Considering data from situations where WTS advanced for three days, in 210 of 330 cases, the price rose further within the following month. The odds of a continued upward trend are 64%.
Bearish Trend Analysis
The Stochastic Oscillator has been in the overbought zone for 1 day. Expect a price pull-back in the near future.
WTS moved below its 50-day moving average on October 22, 2026 date and that indicates a change from an upward trend to a downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where WTS declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 54%.
WTS broke above its upper Bollinger Band on October 02, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for WTS entered a downward trend on October 13, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron Profit vs. Risk Rating rating for this company is 17 (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 76, placing this stock better than average.
The Tickeron PE Growth Rating for this company is 34 (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is 42 (best 1 - 100 worst), indicating steady price growth. WTS’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is 48 (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Seasonality Score of 85 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Valuation Rating of 86 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (5.541) is normal, around the industry mean (4.327). P/E Ratio (31.738) is within average values for comparable stocks, (38.298). Projected Growth (PEG Ratio) (3.180) is also within normal values, averaging (1.879). Dividend Yield (0.007) settles around the average of (0.032) among similar stocks. P/S Ratio (4.365) is also within normal values, averaging (186.943).
KMT | WTS | ||
|---|---|---|---|
OUTLOOK RATING 1..100 | 88 | 35 | |
VALUATION overvalued / fair valued / undervalued 1..100 | 42 Fair valued | 86 Overvalued | |
PROFIT vs RISK RATING 1..100 | 100 | 17 | |
SMR RATING 1..100 | 40 | 48 | |
PRICE GROWTH RATING 1..100 | 51 | 42 | |
P/E GROWTH RATING 1..100 | 94 | 34 | |
SEASONALITY SCORE 1..100 | n/a | 85 |
Tickeron ratings are formulated such that a rating of 1 designates the most successful stocks in a given industry, while a rating of 100 points to the least successful stocks for that industry.
KMT's Valuation (42) in the Industrial Machinery industry is somewhat better than the same rating for WTS (86). This means that KMT’s stock grew somewhat faster than WTS’s over the last 12 months.
WTS's Profit vs Risk Rating (17) in the Industrial Machinery industry is significantly better than the same rating for KMT (100). This means that WTS’s stock grew significantly faster than KMT’s over the last 12 months.
KMT's SMR Rating (40) in the Industrial Machinery industry is in the same range as WTS (48). This means that KMT’s stock grew similarly to WTS’s over the last 12 months.
WTS's Price Growth Rating (42) in the Industrial Machinery industry is in the same range as KMT (51). This means that WTS’s stock grew similarly to KMT’s over the last 12 months.
WTS's P/E Growth Rating (34) in the Industrial Machinery industry is somewhat better than the same rating for KMT (94). This means that WTS’s stock grew somewhat faster than KMT’s over the last 12 months.
| KMT | WTS | |
|---|---|---|
| RSI ODDS (%) | 1 day ago 65% | N/A |
| Stochastic ODDS (%) | 1 day ago 66% | 1 day ago 49% |
| Momentum ODDS (%) | 1 day ago 63% | 1 day ago 67% |
| MACD ODDS (%) | 1 day ago 67% | 1 day ago 66% |
| TrendWeek ODDS (%) | 1 day ago 64% | 1 day ago 62% |
| TrendMonth ODDS (%) | 1 day ago 65% | 1 day ago 58% |
| Advances ODDS (%) | 17 days ago 63% | 2 days ago 64% |
| Declines ODDS (%) | 1 day ago 64% | 10 days ago 54% |
| BollingerBands ODDS (%) | 1 day ago 62% | 1 day ago 48% |
| Aroon ODDS (%) | 1 day ago 63% | 1 day ago 65% |
Long-Term Analysis
It is best to consider a long-term outlook for a ticker by using Fundamental Analysis (FA) ratings. The rating of 1 to 100, where 1 is best and 100 is worst, is divided into thirds. The first third (a green rating of 1-33) indicates that the ticker is undervalued; the second third (a grey number between 34 and 66) means that the ticker is valued fairly; and the last third (red number of 67 to 100) reflects that the ticker is overvalued. We use an FA Score to show how many ratings show the ticker to be undervalued (green) or overvalued (red).
KMT’s FA Score shows that 0 FA rating(s) are green while WTS’s FA Score has 1 green FA rating(s).
- KMT’s FA Score: 0 green, 5 red.
- WTS’s FA Score: 1 green, 4 red.
Short-Term Analysis
It is best to consider a short-term outlook for a ticker by using Technical Analysis (TA) indicators. We use Odds of Success as the percentage of outcomes which confirm successful trade signals in the past.
If the Odds of Success (the likelihood of the continuation of a trend) for each indicator are greater than 50%, then the generated signal is confirmed. A green percentage from 90% to 51% indicates that the ticker is in a bullish trend. A red percentage from 90% - 51% indicates that the ticker is in a bearish trend. All grey percentages are below 50% and are considered not to confirm the trend signal.
KMT’s TA Score shows that 5 TA indicator(s) are bullish while WTS’s TA Score has 4 bullish TA indicator(s).
- KMT’s TA Score: 5 bullish, 5 bearish.
- WTS’s TA Score: 4 bullish, 4 bearish.
Price Growth
KMT (@Tools & Hardware) experienced а +0.68% price change this week, while WTS (@Industrial Machinery) price change was +3.21% for the same time period.
The average weekly price growth across all stocks in the @Tools & Hardware industry was -1.93%. For the same industry, the average monthly price growth was -1.51%, and the average quarterly price growth was -4.54%.
The average weekly price growth across all stocks in the @Industrial Machinery industry was -7.37%. For the same industry, the average monthly price growth was -16.92%, and the average quarterly price growth was -22.09%.
Reported Earning Dates
KMT is expected to report earnings on Nov 04, 2026.
WTS is expected to report earnings on Nov 04, 2026.
Industries' Descriptions
@Tools & Hardware (-1.93% weekly)Tools & Hardware industry includes companies that manufacture security products, storage cabinets, steel rules and tapes, calipers, shoe hook fasteners, lumber, structural materials and other related supplies. Stanley Black & Decker, Inc., Snap-on Incorporated and L.S. Starrett Company are some of the largest, established players in this industry. The industry is also seeing rapid growth in online sales. The proliferation of do-it-yourself (DIY) projects has boosted industry demand. But oil price volatility poses potential risks to this industry, particularly to e-commerce companies which spend on services of shipping companies, which might alter charges based on oil price movements.
@Industrial Machinery (-7.37% weekly)The industry makes and maintains machines for consumers, the industry, and most other companies. While it has traditionally been categorized as heavy industry, some smaller companies are also branching into the light category. The industry is pivotal in providing the equipment for production in businesses like agriculture, mining, industry and construction, gas, electricity and water utilities. It also supplies supporting equipment for almost all sectors of the economy, such as equipment for heating, and air conditioning of buildings. Illinois Tool Works Inc., Parker-Hannifin Corporation and Rockwell Automation Inc are some of the major U.S. companies operating in this industry.
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KMT and
Correlation & Price change
A.I.dvisor indicates that over the last year, KMT has been closely correlated with HLIO. These tickers have moved in lockstep 70% of the time. This A.I.-generated data suggests there is a high statistical probability that if KMT jumps, then HLIO could also see price increases.
| Ticker / NAME | Correlation To KMT | 1D Price Change % | ||
|---|---|---|---|---|
| KMT | 100% | -4.89% | ||
| HLIO - KMT | 70% Closely correlated | -4.16% | ||
| MIDD - KMT | 69% Closely correlated | +1.51% | ||
| TNC - KMT | 68% Closely correlated | +1.18% | ||
| SXI - KMT | 65% Loosely correlated | -9.90% | ||
| WTS - KMT | 64% Loosely correlated | -1.78% | ||
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WTS and
Correlation & Price change
A.I.dvisor indicates that over the last year, WTS has been loosely correlated with HLMN. These tickers have moved in lockstep 65% of the time. This A.I.-generated data suggests there is some statistical probability that if WTS jumps, then HLMN could also see price increases.
| Ticker / NAME | Correlation To WTS | 1D Price Change % | ||
|---|---|---|---|---|
| WTS | 100% | -1.78% | ||
| HLMN - WTS | 65% Loosely correlated | +1.38% | ||
| LECO - WTS | 64% Loosely correlated | -2.34% | ||
| ROP - WTS | 64% Loosely correlated | +9.73% | ||
| SWK - WTS | 60% Loosely correlated | +3.70% | ||
| RBC - WTS | 59% Loosely correlated | -5.24% | ||
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