Business overview
Waters Corporation's (NYSE:WAT) business can be separated into two segments, development and marketing of analytical instruments and the thermal analysis division, also known as "TA". These segments are extremely important to our healthcare system as they provide us with future innovation the can ultimately help cure diseases and cancers. In short, Waters provides the instruments that are used as a platform to discover new drugs, help in food safety, help in crop innovation, quality assurance and for other laboratory uses.
For over 50 years now, Waters has been the leading innovator in liquid chromatography, mass spectrometry, rheometry and microcalorimetry, industries that are becoming increasingly important in today's technology dependent society.
Moat
I believe that Waters' positive contribution to society will continue and become critical in the healthcare industry. Moreover, as it continues to innovate, its moat will become larger, ultimately making it an attractive investment.
Over the course of the last 50 years, Waters has developed important relationships with its clients of which include; multinational bio-science companies, educational institutions and governments.
These clients have become increasingly dependent on Waters' continued innovation in key areas of which are critical to both the client's success, and Waters itself. Moreover, in the industry Waters operates in, customer relationship is essential as scientists are constantly working with Waters in order to learn how to operate certain systems and giving their opinion on what the industry is in need of.
The close relationship Waters has with its clients due to the nature of the business, tied with the need for corporations such as Waters to continue to innovate for the benefit of society, has built a wide moat around the company.
Financials
Over the last 10 years, Waters has been able to grow revenues and a CAGR of close to 6% with no significant acquisitions
