Zurn Elkay approved $0.11 dividend in July as second-quarter earnings rose
Key Facts
Zurn Elkay Water Solutions' board approved a quarterly cash dividend of $0.11 per common share in July 2026, according to a company announcement, as part of its policy of returning capital to shareholders. The announcement set September 4, 2026, as the payment date for shareholders of record on August 20, 2026. The July decision continued dividend payments that the company had previously increased when announcing its third-quarter 2025 results. In that announcement, Zurn Elkay said it had raised its annual dividend by 22% to $0.44 per share. The third-quarter results announcement also included an increase in its share repurchase authorization to $500 million, alongside the annual dividend increase. As for execution during 2025, the company said in its annual results that it had repurchased $160 million of common stock. It also paid $64 million in cash dividends on common shares during the same year, according to the earnings statement, with shareholder returns comprising both dividends and buybacks.
In its second-quarter 2026 results, Zurn Elkay reported an increase in adjusted earnings before interest, taxes, depreciation and amortization to $136 million from $118 million in the corresponding quarter of 2025. The adjusted EBITDA margin reached 27.7% of net sales, compared with 26.5% a year earlier, according to the earnings statement released in July. Adjusted earnings per share also rose to $0.50 from $0.42 in the second quarter of the previous year. During the second quarter, the company received $47.6 million in refunds related to reciprocal tariffs imposed under the International Emergency Economic Powers Act. On the balance sheet, the ratio of net debt to adjusted EBITDA stood at 0.3 times at the end of June 2026. These quarterly results followed a year in which the company repurchased shares and paid cash dividends, and coincided with the continuation of the quarterly dividend announced in July.
Alongside shareholder returns, Zurn Elkay's plans included expansion through an agreement to acquire Intellihot, according to the company's announcement of the deal. The agreement aims to expand its tankless water heater solutions business. These solutions serve the healthcare sector as well as educational institutions, according to the company's description of Intellihot's markets. The targeted sectors also include hospitality and commercial real estate, broadening the commercial applications of the water heater business. When announcing the acquisition agreement, Zurn Elkay estimated Intellihot's 2026 net sales at about $37 million. It said in its announcement that "Intellihot's net sales are expected to be approximately $37 million in 2026," including the estimate in its presentation of the business targeted for acquisition.
For the period following its second-quarter results, Zurn Elkay's outlook announced in July included core sales growth of between 6% and 7% in the third quarter of 2026. This range was part of the performance estimates the company presented at the time, alongside its full-year earnings outlook. For 2026, Zurn Elkay forecast adjusted EBITDA of between $503 million and $513 million. The company excluded tariff-related refunds from its annual guidance range, according to the July earnings statement. That exclusion followed the receipt of refunds during the second quarter, while the earnings estimates covered the full year. The July outlook for the subsequent period thus focused on third-quarter core sales growth and achieving the announced annual earnings range for 2026.