FELE

Franklin Electric is a global leader in water and fuel pumping systems, serving customers from over 240 manufacturing and distribution facilities across 20+ countries. The franchise is high-quality and levered to the durable secular demand for water access, treatment and movement. The operating business performed well in FY2025: revenue grew 5.4% to $2.13B and operating income rose a healthier 10.4% to $269M (a 12.6% operating margin), with a 35.5% gross margin — evidence of pricing power and mix improvement in the core segments.

The blemish is the bottom line. Net income fell 18.4% to $147M and diluted EPS dropped 16.6% to $3.22 even as operating income rose — a divergence pointing to below-the-line drags (higher taxes and/or non-operating items) rather than operational weakness. Cash fell 54.8% to $99.7M as the company deployed capital aggressively into shareholder returns: buybacks surged 171.3% to $166M (cutting the share count 3.3%) and the dividend rose 6.7% to $50M, continuing Franklin's long record of dividend growth. The balance sheet remains conservative with modest debt, and operating cash flow stayed solid at $239M.