Mueller Water Products (NYSE: MWA) and Woodward (NASDAQ:WWD) are both mid-cap industrial products companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, institutional ownership, profitability and earnings.
Mueller Water Products pays an annual dividend of $0.16 per share and has a dividend yield of 1.3%. Woodward pays an annual dividend of $0.50 per share and has a dividend yield of 0.6%. Mueller Water Products pays out 20.0% of its earnings in the form of a dividend. Woodward pays out 15.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Mueller Water Products has raised its dividend for 2 consecutive years. Mueller Water Products is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility and Risk
Mueller Water Products has a beta of 1.29, suggesting that its stock price is 29% more volatile than the S&P 500. Comparatively, Woodward has a beta of 1.24, suggesting that its stock price is 24% more volatile than the S&P 500.
Institutional & Insider Ownership
84.7% of Mueller Water Products shares are held by institutional investors. Comparatively, 71.2% of Woodward shares are held by institutional investors. 4.3% of Mueller Water Products shares are held by company insiders. Comparatively, 5.9% of Woodward shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
This is a summary of recent recommendations and price targets for Mueller Water Products and Woodward, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Mueller Water Products||0||2||7||0||2.78|
Mueller Water Products presently has a consensus price target of $13.88, indicating a potential upside of 8.91%. Woodward has a consensus price target of $74.75, indicating a potential downside of 5.64%. Given Mueller Water Products’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Mueller Water Products is more favorable than Woodward.
Earnings & Valuation
This table compares Mueller Water Products and Woodward’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Mueller Water Products||$1.15 billion||1.76||$184.20 million||$0.80||15.93|
|Woodward||$2.08 billion||2.34||$342.57 million||$3.17||24.99|
Woodward has higher revenue and earnings than Mueller Water Products. Mueller Water Products is trading at a lower price-to-earnings ratio than Woodward, indicating that it is currently the more affordable of the two stocks.
This table compares Mueller Water Products and Woodward’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Mueller Water Products||14.47%||16.85%||5.96%|
Mueller Water Products beats Woodward on 10 of the 17 factors compared between the two stocks.
About Mueller Water Products
Mueller Water Products, Inc. is a manufacturer and marketer of products and services used in the transmission, distribution and measurement of water in North America. The Company operates through three segments: Mueller Co., Anvil and Mueller Technologies. The Mueller Co. segment manufactures valves for water and gas systems, and dry-barrel and wet-barrel fire hydrants. The Anvil segment manufactures and sources a range of products, including a range of fittings, couplings, hangers and related products. The Mueller Technologies segment offers metering systems, leak detection, pipe condition assessment and other products and services for the water infrastructure industry. The Mueller Technologies segment includes Mueller Systems and Echologics businesses. The Company offers a range of water infrastructure, flow control and piping component system products and services in the United States and Canada.
Woodward, Inc. is an independent designer, manufacturer and service provider of energy control and optimization solutions. The Company designs, produces and services energy control products for various applications. The Company’s segments include Aerospace and Industrial. The Company’s Aerospace segment designs, manufactures and services systems and products for the management of fuel, air, combustion and motion control. The Company’s Industrial segment designs, produces and services systems and products for the management of fuel, air, fluids, gases, electricity, motion and combustion. The Company has production and assembly facilities in the United States, Europe and Asia and South America, and promotes its products and services throughout the world. The Company offers solutions for the aerospace, industrial and energy markets. The Company focuses primarily on serving original equipment manufacturers (OEMs) and equipment packagers.
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