MUELLER INDUSTRIES INC (NYSE:MLI) – A Quality Stock Worth Considering

MUELLER INDUSTRIES INC (NYSE:MLI) was identified by our Caviar Cruise screener as a potential candidate for quality investors. The company, which manufactures copper, brass, aluminum, and plastic products, demonstrates strong profitability, financial health, and growth characteristics. Below, we examine why MLI fits the criteria for a quality investment.

Key Strengths of MLI

• High Return on Invested Capital (ROIC): MLI’s ROIC (excluding cash and goodwill) stands at an impressive 44.73%, well above the 15% threshold for quality stocks. This indicates efficient use of capital to generate profits.
• Strong EBIT Growth: The company has achieved a 32.46% annual EBIT growth over the past five years, reflecting improving operational profitability.
• Minimal Debt Burden: MLI’s debt-to-free cash flow ratio is negligible at 0.0003, meaning the company has almost no debt relative to its cash flow.
• Profit Quality: With a five-year average profit quality of 100.88%, MLI converts nearly all its net income into free cash flow, a sign of financial efficiency.

Fundamental Analysis Highlights

Our fundamental report rates MLI 8 out of 10, with notable strengths in profitability and financial health:

• Profitability Score: 9/10 – MLI outperforms most peers in return on assets (19.31%), return on equity (23.40%), and operating margin (19.76%).
• Financial Health: 10/10 – The company has no significant debt, a strong current ratio (4.29), and a high Altman-Z score (13.28), indicating low bankruptcy risk.
• Growth & Valuation: MLI has delivered strong past growth (42.60% annual EPS growth) and trades at a reasonable P/E of 14.79, below industry and S&P 500 averages.

Why Quality Investors Should Take Note

MLI meets multiple criteria for quality investing: high ROIC, strong cash flow conversion, minimal debt, and consistent profitability. While past performance is no guarantee of future results, the company’s fundamentals suggest it could be a durable long-term holding.

For more quality stock ideas, explore our Caviar Cruise screener.

Disclaimer

This is not investing advice. Always conduct your own research before making investment decisions.