Here's Why Hold Strategy is Apt for Xylem Stock Right Now

Core Insights - Xylem Inc. (XYL) is experiencing strong momentum in its Measurement & Control Solutions segment, driven by high demand for advanced technology solutions such as smart metering [1] - The Water Infrastructure segment is benefiting from increased infrastructure projects in the U.S., particularly in the transport application business [1] - The Applied Water segment is recovering due to higher demand for building solutions applications [1] Financial Performance - As of the end of Q1 2025, Xylem's backlog reached $5.1 billion, supported by strong demand across utilities, industrial, and building solutions markets [2] - For 2025, Xylem anticipates revenues between $8.7 billion and $8.8 billion, reflecting a year-over-year increase of 1-2% [2] - In 2024, acquisitions contributed $786 million to the company's total revenues [4] Strategic Acquisitions - In December 2024, Xylem completed the acquisition of a majority stake in Idrica, enhancing its growth opportunities and market penetration [3] - The acquisition of Evoqua in May 2023 added advanced water and wastewater treatment capabilities to Xylem's portfolio, complementing its solutions across the water cycle [4] Shareholder Returns - In Q1 2025, Xylem paid dividends totaling $98 million and repurchased shares worth $12.9 million [5] - The company increased its dividend rate by 11% in February 2025 [5] Debt and Cost Management - Xylem exited Q1 2025 with long-term debt of $1.97 billion, while cash and cash equivalents stood at $1.06 billion [9] - The company faced rising operating costs, with a 15.1% year-over-year increase in cost of revenues in 2024, and a 1.6% increase in Q1 2025 [9]