Zurn Elkay, a water management solutions provider, stands out amongst cash-producing stocks with an 18.4% trailing 12-month free cash flow margin. The company demonstrates strong fundamentals with a gross margin of 42.6% and improving efficiency, as its operating margin expanded by 3.7 percentage points over five years. In contrast, F5 and Sonos face significant headwinds. F5, despite a 29.9% free cash flow margin, struggles with sluggish 3.3% ARR growth and stagnant operating margins. Sonos shows even weaker performance with only an 8.1% free cash flow margin, declining annual sales of 1.4% over five years, and earnings per share dropping 9.3% annually. Zurn Elkay's strong 15.1% free cash flow margin and improved cash conversion indicate growing capital efficiency.

Zurn Elkay Water Solutions reported first quarter 2026 net sales of $433 million, up 11% year-over-year on a core sales basis. Net income from continuing operations reached $59 million, or $0.35 per diluted share, compared with $41 million ($0.24 per share) in the prior-year quarter. Adjusted EBITDA rose to $116 million, representing 26.8% of net sales, up from $98 million (25.2% of sales) a year earlier. The Milwaukee-based water management company expanded its credit facility from $200 million to $550 million and deployed $50 million to repurchase one million shares during the quarter. Net debt leverage stood at 0.5x as of 31st March 2026. For the second quarter, the company expects core sales growth of 8% to 9% and adjusted EBITDA margins between 27.0% and 27.5%.

Zurn Elkay Water Solutions has released its 2025 Sustainability Report, highlighting progress in environmental stewardship and water filtration technology. The company's products delivered 2.4 billion gallons of filtered drinking water and prevented approximately 20 billion plastic bottles from entering landfills and waterways. The Milwaukee-based firm expanded its water filtration coverage to address PFAS contamination and launched new products including filters certified to reduce Total PFAS and the Elkay Pro Filtration line. Two production facilities achieved zero-waste-to-landfill validation. Zurn Elkay set a new target to reduce water withdrawal intensity by 3% by 2030 and partnered with TerraCycle to introduce a recycling programme for used filters. The company also expanded its residential filtration offerings with the Liv EZ product line.