Xylem (XYL)
Key Statistics
EV/EBIT = 30.8x
ROE = 8.76%
Debt/Equity = 19%
FCF Yield = 2.49%
Dividend Yield = 1.12%
Market Cap = $35.13 billion
The Company
Xylem (XYL) plays a critical role in ensuring that communities, industries, and utilities have access to clean and reliable water.
Xylem designs and sells a wide range of water technology solutions. Its products include pumps that transport water, treatment systems that make water safe to drink or return to the environment, meters that measure water usage, and advanced digital platforms that monitor and control entire water networks. The company earns revenue from selling this equipment, as well as from ongoing services such as maintenance contracts, software subscriptions, analytics platforms, and equipment rentals. This approach helps customers manage water more efficiently and sustainably, reducing waste and cutting costs while protecting the environment.
Xylem is well-positioned to benefit from several long-term global trends. Rapid urbanization drives the need for reliable water infrastructure in growing cities. Climate change increases demand for resilient systems to handle floods, droughts, and extreme weather. Rising water scarcity pressures utilities to adopt efficient treatment and reuse technologies. Stricter environmental regulations push industries and municipalities to invest in advanced solutions for water quality, conservation, and energy efficiency. These trends create expanding markets for Xylem’s innovative products, services, and digital water technologies.
The history of Xylem begins with ITT Corporation, a large American industrial conglomerate known for its diverse businesses. On January 12, 2011, ITT announced plans to separate into three stand-alone, publicly traded companies so each could focus more closely on its core strengths. As part of this restructuring, ITT spun off its water-related businesses into a new company named Xylem, while also creating ITT Exelis for its defense operations. ITT itself retained its original name and other industrial activities. The name “Xylem” comes from the Greek word for the plant tissue that transports water, symbolizing the company’s mission to move and treat water.
The separation was completed in October 2011, making Xylem an independent water technology company. At the start, it operated three business units: Water Solutions, Analytics, and Applied Water Systems. These units laid the foundation for Xylem’s leadership in providing equipment and services for transporting, treating, and analyzing water across the entire water cycle. Under its first leader, Steven Loranger—who had also served as ITT’s CEO—the company established itself as a major global player. In March 2014, Patrick Decker became CEO and president, ushering in a new era of growth and strategic expansion.
One of the most significant moments in Xylem’s history came in May 2023, when it acquired Evoqua Water Technologies in an all-stock deal valued at $7.5 billion. Evoqua was a major provider of water and wastewater treatment solutions and services. This acquisition combined the strengths of both companies to create the world’s largest pure-play water technology firm—meaning its business is focused entirely on water. The merger expanded Xylem’s capabilities, especially in advanced treatment technologies and services, and positioned it as a global leader in addressing water quality and sustainability challenges.
Xylem has continued to show innovation beyond traditional water infrastructure. In 2024, in partnership with the city of Weissenburg, Germany, and the Technical University of Munich, Xylem helped launch an inventive project called Reuse Brew. This initiative used recycled wastewater, purified through advanced processes involving ozone injection, ultraviolet radiation, carbon filters, and nano-filtration, to brew a traditional German pale lager beer. While largely symbolic, Reuse Brew demonstrated the potential of modern water treatment technologies to make water reuse safe, practical, and even appealing to the public.
By 2024, Xylem had grown to earn $8.56 billion in revenue. Its largest market was the United States, which accounted for 57% of total revenue, followed by Western Europe at 20%, Emerging Markets at 15%, and Other regions at 8%. This geographic diversity helps the company serve a wide range of customers, from advanced economies with aging water infrastructure to rapidly developing regions facing water scarcity and pollution.
Xylem’s mission is centered on addressing some of the most pressing global water challenges: scarcity, quality, affordability, and resilience. Water scarcity refers to the limited availability of fresh water due to factors like drought, climate change, and overuse. Water quality is about ensuring that water is safe for drinking, agriculture, and industrial use. Affordability focuses on improving the efficiency of delivering and treating water to reduce costs for utilities and consumers. Resilience refers to strengthening water infrastructure to withstand natural disasters, climate impacts, and aging systems. Xylem’s products and services help tackle all these challenges by improving efficiency, reducing waste, and extending the life of existing infrastructure.
The company operates through four main business segments. Each segment focuses on different stages of the water cycle and contributes to Xylem’s overall revenue.
