Forensic Analysis · Industrials / Manufacturing / Defense · as of Aug 10, 2026
Xylem Inc. (XYL)
A forensic read on Xylem Inc. built from its complete SEC filings — financial-health screens, earnings quality, red flags and a price-aware rating. Reproducible math, not opinion.
A · High-quality compounder
Forensic grade
Safe
Financial health
6.8
Distress distance
Clean
Earnings quality
4
Forensic signals
27.7
P / E (ttm)
8.3%
ROE
$28.2B
Market cap
1.46%
Dividend yield
5.5%
Revenue growth
This free snapshot doesn't read filing or proxy text, so the auditor-quality and governance checks that can lower a grade were not evaluated (red flags, auditor quality, say on pay, board independence). Those checks only ever lower a grade, so the full analysis can land below the grade above but never above it — treat it as the most favourable reading, not the settled one.
Xylem Inc. earns an A (High-quality compounder) forensic quality grade, and its balance-sheet distress test reads 6.8, placing it in the Safe zone. 4 forensic signals were flagged in its latest SEC filings, led by share-count dilution.
What the filings flag
+10.5%/yr
FY2022–FY2025
Share-count dilution.Diluted share count changed +35% over the last 3 years to FY2025 (+10.5%/yr). The count is growing: more stock was issued than repurchased over this window, so aggregate results grew faster than their per-share equivalents. That's ~10.5% shaved off per-share growth every year — total profit has to grow that much just to keep earnings-per-share flat, and a stake held since FY2022 has been diluted ~26%.
7.1%
FY2025
Return on invested capital.Return on invested capital is 7.1% in the latest fiscal year and slipping from 9% — slightly below its ~9% cost of capital — reinvestment is roughly a wash.
0.6% of rev
FY2025
Stock-based comp load.Stock-based compensation ran 0.6% of revenue and 6% of free cash flow in FY2025 — about $0.22 per diluted share. The cost of it is not in the cash flow — no cash left the business — it is in the count, and there it has run at about 10.8% a year and is falling.
$206M
FY2019–FY2020
Goodwill impairments.Took $206M of goodwill writedowns across 2 years (FY2019 ($148M), FY2020 ($58M)) — about 31% of net income over the span. Writedowns mean past acquisitions underperformed what was paid for them.
Key fundamentals
Latest Revenue$9.04B
Revenue Growth YoY+5.5%
Revenue CAGR (3yr)+17.8%
Net Margin10.6%
Free Cash Flow$910.0M
Return on Equity8.3%
Debt / Equity0.17x
The forensic grade and screens above are free — no account needed. Want the AI investment read on top — the 0–100 rating, thesis, bull-vs-bear, red flags and the 12-month scenario, written from Xylem Inc.'s actual 10-K/10-Q/8-K filings?