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Watts CoTSE:2735 +1.12%55 Return-on-Tangible-Equity is 9.31% as of Feb. 2026, which is 25% above its 10-year median of 7.47. GuruFocus rates TSE:2735 with a GF Score™ of 55/100 and a GF Value™ of 円696.63 (Fairly Valued). The stock has 3 warning signs investors should review. Among 301 Retail - Defensive companies, Watts Co ranks worse than 56.81% on this metric.
Return-on-Tangible-Equity is calculated as Net Income divided by its average total shareholder tangible equity. Total shareholder tangible equity equals to Total Stockholders Equity minus Intangible Assets. Watts Co's annualized net income for the quarter that ended in Feb. 2026 was 円1,203 Mil. Watts Co's average shareholder tangible equity for the quarter that ended in Feb. 2026 was 円12,925 Mil. Therefore, Watts Co's annualized Return-on-Tangible-Equity for the quarter that ended in Feb. 2026 was 9.31%.
The historical rank and industry rank for Watts Co's Return-on-Tangible-Equity or its related term are showing as below:
TSE:2735'
s Return-on-Tangible-Equity Range Over the Past 10 Years
Min: 0.69 Med: 7.47 Max: 9.26
Current: 8.47
During the past 13 years, Watts Co's highest Return-on-Tangible-Equity was 9.26%. The lowest was 0.69%. And the median was 7.47%.
TSE:2735's Return-on-Tangible-Equity is ranked worse than 56.81% of 301
companies
in the Retail - Defensive industry
Industry Median: 10.69
vs TSE:2735: 8.47
Watts Co (TSE:2735) Return-on-Tangible-Equity Explanation
Return-on-Tangible-Equity measures the rate of return on the ownership interest (shareholder's tangible equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' tangible equity (shareholders equity minus intangibles). Return-on-Tangible-Equity shows how well a company uses investment funds to generate earnings growth. Return-on-Tangible-Equitys between 15% and 20% are considered desirable.
Be Aware
Net Income is used.
Because a company can increase its Return-on-Tangible-Equity by having more financial leverage, it is important to watch the leverage ratio when investing in high Return-on-Tangible-Equity companies. Like Return-on-Tangible-Asset, Return-on-Tangible-Equity is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Asset light businesses require very few assets to generate very high earnings. Their Return-on-Tangible-Equitys can be extremely high.
Watts Co Return-on-Tangible-Equity Related Terms
Watts Co Return-on-Tangible-Equity Historical Data
* Premium members only.
The historical data trend for Watts Co's Return-on-Tangible-Equity can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
TSE:2735 vs KR: Return-on-Tangible-Equity Comparison
For the Grocery Stores subindustry, Watts Co's Return-on-Tangible-Equity, along with its competitors' market caps and Return-on-Tangible-Equity data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Watts Co Return-on-Tangible-Equity vs Retail - Defensive Industry
For the Retail - Defensive industry and Consumer Defensive sector, Watts Co's Return-on-Tangible-Equity distribution charts can be found below:
* The bar in red indicates where Watts Co's Return-on-Tangible-Equity falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
In the calculation of annual Return-on-Tangible-Equity, the net income of the last fiscal year and the average total shareholder tangible equity over the fiscal year are used. In calculating the quarterly data,
the net income data used here is four times the quarterly (Feb. 2026) net income data.
Return-on-Tangible-Equity is displayed in the 10-year financial page.
What does a Return-on-Tangible-Equity of 9.31% mean?
Watts Co (TSE:2735) has a Return-on-Tangible-Equity of 9.31% as of Feb. 2026. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on Watts Co and its competitors. This is 25% above median its historical median of 7.47. Over the past decade, Watts Co's Return-on-Tangible-Equity has ranged from 0.69 to 9.26. According to the industry distribution chart, Watts Co ranks #171 out of 301 companies in the Retail - Defensive industry, placing it in the top 56.8%.
Is Watts Co's Return-on-Tangible-Equity too high?
Watts Co's current Return-on-Tangible-Equity of 9.31% is 25% above median its 10-year median of 7.47. Over the past 10 years, this metric has ranged from a low of 0.69 to a high of 9.26. The Retail - Defensive industry median Return-on-Tangible-Equity is 10.69. Watts Co's value of 9.31% is 12.9% below this industry median. Based on the distribution chart, Watts Co ranks #171 out of 301 companies in the Retail - Defensive industry, which is below the industry midpoint. Overall, Watts Co has a GF Score™ of 55/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Watts Co's Return-on-Tangible-Equity compare to KR?
According to the Retail - Defensive industry distribution chart, Watts Co ranks #171 out of 301 companies for Return-on-Tangible-Equity. This places Watts Co in the lower half of its industry. The industry median Return-on-Tangible-Equity is 10.69. Watts Co's value of 9.31% is 12.9% below this benchmark. Historically, Watts Co's own Return-on-Tangible-Equity has ranged from 0.69 to 9.26 over the past decade. While the company's 10-year median is 7.47 vs. the industry median of 10.69, Watts Co has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Return-on-Tangible-Equity for a Retail - Defensive company?
The median Return-on-Tangible-Equity among Retail - Defensive companies is 10.69, based on 301 companies in the industry. Companies in the top quartile (top 25%) have a Return-on-Tangible-Equity significantly above this median, while those in the bottom quartile fall well below. However, Return-on-Tangible-Equity should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Watts Co's current Return-on-Tangible-Equity of 9.31% is 12.9% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Return-on-Tangible-Equity mean?
A high Return-on-Tangible-Equity can signal that a stock is expensive relative to its fundamentals. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on Watts Co and its competitors. For the Retail - Defensive industry, the median Return-on-Tangible-Equity is 10.69 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Watts Co's current Return-on-Tangible-Equity is 9.31%, which is 25% above median its own 10-year median of 7.47. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Watts Co stock overvalued right now?
Based on GuruFocus' analysis, Watts Co (TSE:2735) is currently considered Fairly Valued. The stock's GF Value™ is 円696.63, compared to a current price of 円724.00 — trading 3.9% above its estimated fair value. The current Return-on-Tangible-Equity is 9.31%, which is 25% above median its 10-year median of 7.47 and 12.9% below the Retail - Defensive industry median of 10.69. Watts Co's overall GF Score™ is 55/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Return-on-Tangible-Equity calculated?
Return-on-Tangible-Equity is calculated from a company's financial statements. For Watts Co (TSE:2735), the current Return-on-Tangible-Equity is 9.31% as of Feb. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Watts Co (TSE:2735) Overvalued in 2026?
Based on GuruFocus' analysis, Watts Co stock appears to be overvalued.
The current stock price of 円724.00 is trading 3.9% above its estimated GF Value™ of 円696.63.
GuruFocus considers Watts Co to be Fairly Valued.
Key valuation signals for TSE:2735:
Return-on-Tangible-Equity: 9.31% (25% above median its 10-year median of 7.47)
GF Value™: 円696.63 vs. price of 円724.00 (3.9% above fair value)
Industry Position: 12.9% below the Retail - Defensive median (#171 of 301)
No single metric tells the full story. See the TSE:2735 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Watts Co Ltd is engaged in the wholesale of daily necessities, grocery and food products, and other goods. The company's product profile includes Sanitary goods, Cleaning sheet, Water supply equipment, Lunch supplies, and other related products.
55GF Score
Get the complete analysis for TSE:2735
Return-on-Tangible-Equity is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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