Exploring Zurn Elkay Water Solutions Corporation (ZWS) Investor Profile: Who’s Buying and Why?

You're looking at Zurn Elkay Water Solutions Corporation (ZWS) and wondering why the smart money is so defintely concentrated here, especially with the stock trading near its 52-week high of $50.03 as of November 2025. It's a classic question: Are institutions buying for the momentum or the fundamentals? The reality is that institutional ownership is massive, sitting at nearly 89.2% of shares, with giants like BlackRock, Inc. and Vanguard Group Inc. collectively holding a stake valued well over $1.8 billion. This isn't just passive indexing; it's a bet on the company's execution, which delivered Q3 2025 revenue of $455.40 million and an EPS of $0.43, beating analyst consensus. So, what are these major players seeing in the water solutions space that justifies their accumulation, even as the average analyst price target sits a bit lower at $42.83? Let's break down who is buying, who is selling, and whether Zurn Elkay's raised full-year adjusted EBITDA guidance of up to $430 million is enough to keep the institutional conviction high.

Who Invests in Zurn Elkay Water Solutions Corporation (ZWS) and Why?

The investor base for Zurn Elkay Water Solutions Corporation (ZWS) is overwhelmingly institutional, which tells you the stock is viewed as a high-quality, long-term holding in the Industrials sector. As of late 2025, a massive 83.33% of the company's stock is held by institutional investors, including mutual funds, pension funds, and hedge funds. This isn't a stock driven by retail chatter; it's a staple in large, diversified portfolios.

The remaining ownership is split between private companies, which hold about 8.61%, and individual insiders, who hold a smaller 2.17%. When you see this kind of concentration, it signals a belief in the company's core business model-a pure-play water management leader-and its ability to generate consistent cash flow, which is exactly why firms like BlackRock and Vanguard are the biggest players here.

Here's the quick math on the biggest holders:

• BlackRock, Inc.: Holds approximately 14.1% of the company, equating to over 23.6 million shares, valued at roughly $1.1 billion.
• The Vanguard Group, Inc.: Holds about 10.1%, or over 16.9 million shares, valued at nearly $779.4 million.
• Kayne Anderson Rudnick Investment Management LLC: A significant holder with a 7.84% stake.

The Core Investment Motivations: Growth, Cash, and Water

Investors aren't buying Zurn Elkay Water Solutions Corporation for a quick flip; they are buying a stable, growing business tied to essential infrastructure. The motivation is a blend of defensive positioning and clear capital allocation. The company's focus on specification-driven water management solutions-from filtered drinking water stations to professional-grade control products-makes it an essential service provider, less exposed to the volatility of new construction.

The 2025 financial performance is what really grounds this thesis. Management raised its full-year 2025 outlook, projecting core sales growth of approximately 8% and Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) to land between $437 million and $440 million. That's a strong margin story, with Adjusted EBITDA margins hitting a record 26.8% in the third quarter of 2025.

Plus, the environmental, social, and governance (ESG) angle is defintely a draw. Being named one of the World's Best Companies for Sustainable Growth by TIME appeals directly to the massive pool of capital in ESG-mandated funds, especially given the company's core mission to improve health and conserve resources. You can read more about their business model at Zurn Elkay Water Solutions Corporation (ZWS): History, Ownership, Mission, How It Works & Makes Money.

Strategies: Value, Long-Term Holding, and Capital Return

The typical strategy for holding Zurn Elkay Water Solutions Corporation is a long-term, buy-and-hold approach, often categorized as a 'quality growth' or 'value at a reasonable price' investment. The stock trades at a premium, but investors justify this with the company's high margins and robust capital return program.

The company's capital allocation strategy is a clear signal to investors:

• Dividend Growth: The annual dividend was recently increased by 22% to $0.44 per share, showing a commitment to returning capital, even with a modest dividend yield of around 0.93%.
• Share Buybacks: The Board refreshed the share repurchase authorization to $500 million, with $135 million deployed year-to-date through Q3 2025. This shrinks the share count and boosts earnings per share (EPS).
• Balance Sheet Strength: The net debt leverage ratio dropped to a very low 0.6x as of September 30, 2025, which is the lowest as a public company. This low leverage gives them flexibility for acquisitions or further buybacks.

What this estimate hides is the insider selling. While institutions are net buyers, individual insiders have been net sellers in the last three months of 2025, which can sometimes signal that management sees the stock as fully valued in the near term. For example, a director sold shares for over $500,000 in early November 2025. Still, the institutional buying pressure and strong fundamentals suggest the long-term growth story remains intact for most sophisticated investors.

Institutional Ownership and Major Shareholders of Zurn Elkay Water Solutions Corporation (ZWS)

The investor profile for Zurn Elkay Water Solutions Corporation (ZWS) is defintely a story of institutional conviction. You should know that a massive portion of the company-around 83.33% to 89.2% of the outstanding shares-is held by large institutional money managers, not individual retail investors. This high concentration signals a strong vote of confidence from the professional investment community, but it also means the stock's price movements are heavily influenced by the trading decisions of a few major players.

For a company like Zurn Elkay Water Solutions Corporation, which operates in the critical, specification-driven water management sector, this level of institutional backing provides a layer of market stability. It means the stock is not as susceptible to the short-term emotional swings that often plague companies with high retail ownership. The institutional focus is on long-term, sustainable growth, which is exactly what a water infrastructure play should deliver.

Top Institutional Investors: Who's Holding the Line?

When you look at the major holders, you see the biggest names in asset management. These are the funds that manage trillions of dollars, and their positions in Zurn Elkay Water Solutions Corporation are substantial, reflecting their belief in the company's core business and its alignment with environmental, social, and governance (ESG) trends. As of the Q3 2025 filings, the top institutional investors hold significant equity stakes.

Here's the quick math on the top shareholders, based on Q3 2025 data:

Recent Shifts: Are They Buying or Selling?

The institutional picture is never static. In the most recent quarter (Q3 2025), we saw a mixed bag of activity, which is normal. The largest holders, BlackRock, Inc. and Vanguard Group Inc, trimmed their positions slightly-BlackRock reduced its stake by about 1.26%, and Vanguard by 0.38%. This often reflects portfolio rebalancing within their massive index or mutual funds, not necessarily a negative view on Zurn Elkay Water Solutions Corporation itself. Still, it's a slight decrease in accumulation.

But other major players were buying. Macquarie Group Ltd, for example, dramatically increased its position by a staggering 86.2% in the same period, adding a significant number of shares. Plus, smaller but still major firms like Ameriprise Financial Inc. and Campbell & CO Investment Adviser LLC showed large purchase increases in earlier 2025 quarters, with Ameriprise boosting its position by 74.1% in Q1. The overall 'Fund Sentiment Score' still points to a high level of institutional accumulation, meaning more funds are initiating or increasing positions than are closing them out.

The Impact of Institutional Investors on Strategy and Stock Price

The high institutional ownership is a powerful lever on corporate strategy. These investors demand clear capital allocation (how the company uses its money) and consistent execution. The company's recent actions directly reflect this pressure to enhance shareholder value, which is one reason to review the Mission Statement, Vision, & Core Values of Zurn Elkay Water Solutions Corporation (ZWS).

• Driving Capital Returns: The firm recently increased its annual dividend by 22%, raising the payout to $0.44 per share, a move that strongly appeals to income-focused institutional funds.
• Boosting Shareholder Value: Management expanded its share repurchase authorization to $500 million, a clear signal to the market that they believe the stock is undervalued and are committed to reducing the share count. They deployed $25 million to repurchase 0.6 million shares in Q3 2025 alone.
• Stock Price Validation: The market has rewarded this performance and institutional interest. The stock price rose by 19.25% from November 2024 to November 2025, and the year-to-date return was approximately 27.5% as of late 2025. This performance is fundamentally supported by strong Q3 2025 results, including net sales of $455.4 million (up 11% year-over-year) and adjusted EBITDA of $122 million.

Institutional investors are essentially the company's accountability partners. Their close monitoring encourages management to maintain a low net debt leverage-which dropped to just 0.6x in Q3 2025-giving Zurn Elkay Water Solutions Corporation the financial flexibility (optionality) to pursue strategic mergers and acquisitions (M&A) or further buybacks. That's the real value of having the big money on your side.

Key Investors and Their Impact on Zurn Elkay Water Solutions Corporation (ZWS)

You're looking at Zurn Elkay Water Solutions Corporation (ZWS) and trying to figure out who is driving the bus, and honestly, the answer is the big institutional money. These aren't retail investors moving the needle; nearly 92.64% of the stock is held by institutions, which means their decisions dictate the stock's long-term stability and short-term volatility.

The investor profile is dominated by the giants of asset management-firms with a passive, long-term view. This high level of institutional ownership, which is closer to 83.33% by some recent measures, is a clear signal that the company is viewed as a foundational holding in industrial and water-focused portfolios.

Notable Institutional Investors and Their Stakes

When you look at the top shareholders, you see the names that manage trillions of dollars. Their presence is less about aggressive activism and more about capital preservation and steady growth, which aligns with Zurn Elkay Water Solutions Corporation's essential business model in water solutions. Here's the quick math: these top three alone control a massive chunk of the company's equity.

BlackRock, Inc. and Vanguard Group Inc are the two largest shareholders, which is typical for a stable, high-quality industrial company like Zurn Elkay Water Solutions Corporation. Their holdings are often tied to index funds (passive investing), which means they are not going to sell unless the company is removed from an index or their fund's mandate changes. That's a huge anchor of stability, defintely. Kayne Anderson Rudnick Investment Management LLC, on the other hand, is a more active manager, and their significant position suggests a belief in the company's execution and market position.

Investor Influence: Capital Allocation and Strategy

The influence of these major investors is subtle but powerful, primarily channeling through capital allocation policy. They aren't pushing for a hostile takeover, but they demand efficiency and shareholder returns. For Zurn Elkay Water Solutions Corporation, this translates into a clear focus on returning capital to shareholders, supported by a strong balance sheet.

• Demand for Cash Return: The Board recently increased the annual dividend by 22% to $0.44 per share.
• Share Buyback Commitment: The share repurchase authorization was significantly increased to $500 million in Q3 2025.
• Financial Health: The company's net debt leverage was a record low of 0.6x as of September 30, 2025, a figure that keeps institutional investors very happy.

The company's ability to generate cash-with full-year 2025 free cash flow expected to be greater than $300 million-is the core reason these institutions remain invested. That cash generation gives management the flexibility to pursue mergers and acquisitions (M&A) or continue buybacks, both of which boost shareholder value. You can dig deeper into the company's fundamentals by checking out Breaking Down Zurn Elkay Water Solutions Corporation (ZWS) Financial Health: Key Insights for Investors.

Recent Notable Moves by Investors

Looking at the most recent 13F filings (institutional ownership reports), you see a mixed but generally positive picture of accumulation. While the top three passive holders showed minor reductions in their Q3 2025 filings-BlackRock, Inc. reduced its stake by 1.423%-other managers were actively accumulating.

Macquarie Group Ltd. was a strong buyer, increasing its position by over 3.46 million shares in the third quarter of 2025 alone. This is a clear vote of confidence, suggesting they see the raised full-year 2025 Adjusted EBITDA guidance of $437 million to $440 million as highly achievable. Also, new money is coming in: Future Fund LLC bought a new position of 19,892 shares in Q2 2025, valued at around $727,000. This shows a broadening institutional interest, not just consolidation among existing holders.

To be fair, there was some insider selling in July 2025, where two executives sold a combined 199,846 shares. However, management noted that a significant portion of this was pre-arranged under a Rule 10b5-1(c) trading plan, which is a common, non-discretionary way for executives to liquidate shares over time. Plus, the company's concurrent share repurchases of $135 million year-to-date through Q3 2025 more than offset the insider selling volume. So, the net action is still heavily weighted toward shareholder value creation.

Market Impact and Investor Sentiment

You're looking at Zurn Elkay Water Solutions Corporation (ZWS) after a strong run, trying to figure out if the big money still sees upside. The short answer is: investor sentiment is defintely positive, but the valuation is getting stretched, leading to a split view among analysts. The stock has delivered a 27.5% return year-to-date in 2025, a clear sign of market enthusiasm driven by solid execution.

The institutional backing is massive, with hedge funds and other institutional investors owning between 83.33% and 92.64% of the stock. This high level of institutional ownership suggests a strong, long-term belief in the company's business model-focused on water management solutions and the high-margin filtration segment. Honestly, when the smart money holds that much, they're not looking for a quick flip; they're betting on the fundamental story. Learn more about that foundational story here: Zurn Elkay Water Solutions Corporation (ZWS): History, Ownership, Mission, How It Works & Makes Money.

The sentiment is best described as a 'Moderate Buy' consensus, which is a good place to be. It means the market is rewarding performance but also building in a healthy dose of realism about future growth. The core of this positive sentiment stems from Zurn Elkay Water Solutions's ability to consistently beat expectations and improve its profitability (Adjusted EBITDA margin hit 26.8% in Q3 2025).

Recent Market Reactions to Financial Strength

The stock market has reacted powerfully to Zurn Elkay Water Solutions's financial updates, especially the Q3 2025 earnings released in late October. The company reported net sales of $455 million for the quarter, an 11% increase year-over-year, which easily topped analyst estimates of $442.62 million. That kind of beat is what drives share price momentum.

The management's subsequent actions reinforced the bullish case. They raised the full-year 2025 Adjusted EBITDA outlook to a range of $437 million to $440 million (up from a previous range of $420 million to $430 million), and increased the annual dividend by 22% to $0.44 per share. This is a concrete signal to investors: the company is generating exceptional cash flow-expected to be greater than $300 million for the full year-and is committed to returning capital. A company buying back stock and raising the dividend is telling you they think their shares are a good investment. Simple as that.

Still, you need to watch insider activity. While the company is repurchasing shares, insiders sold a net of 40,100 shares in the last quarter, including a sale of 21,570 shares by a Chief Administrative Officer in November 2025. This isn't a panic, but it's a small counter-signal that warrants attention, especially at higher valuation levels.

Analyst Perspectives: Valuation vs. Growth

The analyst community is generally positive on the business fundamentals but is starting to flag the high valuation, which is why the consensus is a 'Moderate Buy' rather than a 'Strong Buy.' The average 12-month price target sits around $42.83 to $44.50, which, to be fair, suggests a slight downside from the current price in late 2025. However, the highest targets go up to $53.00, reflecting the most bullish scenarios.

Here's a quick snapshot of the key analyst thinking:

• Bullish View: Analysts like Mizuho and Oppenheimer, with price targets up to $53.00, are encouraged by the 11% core sales growth and the success of the Elkay Pro Filtration platform. They see continued double-digit earnings and cash flow growth.
• Cautious View: The P/E ratio is the main sticking point. At approximately 42.2x, the stock trades at a substantial premium compared to the US Building industry average of 21.2x. This suggests that a lot of future growth is already priced in, leading some analysts to maintain a 'Hold' rating despite the strong financials.

What this estimate hides is the quality of the earnings. The company's focus on high-margin products and operational efficiency is driving superior profit margins, which justifies some of the valuation premium. The risk is that any slowdown in the non-residential construction cycle could quickly challenge those high growth expectations. The bottom line is, the analysts are positive on the business, but they are realistic about the price.