MUELLER WATER PRODUCTS INC-A (MWA) Stock Fundamental Analysis
NYSE:MWA - New York Stock Exchange, Inc. - US6247581084 - Common Stock - Currency: USD
MWA gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 127 industry peers in the Machinery industry. Both the health and profitability get an excellent rating, making MWA a very profitable company, without any liquidiy or solvency issues. MWA is not valued too expensively and it also shows a decent growth rate. These ratings could make MWA a good candidate for quality investing.
1. Profitability
1.1 Basic Checks
In the past year MWA was profitable.
MWA had a positive operating cash flow in the past year.
Each year in the past 5 years MWA has been profitable.
MWA had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a decent Return On Assets value of 8.61%, MWA is doing good in the industry, outperforming 74.80% of the companies in the same industry.
MWA has a Return On Equity of 16.47%. This is in the better half of the industry: MWA outperforms 74.02% of its industry peers.
MWA's Return On Invested Capital of 12.61% is fine compared to the rest of the industry. MWA outperforms 77.17% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for MWA is in line with the industry average of 10.78%.
The last Return On Invested Capital (12.61%) for MWA is above the 3 year average (9.01%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.61% | ||
| ROE | 16.47% | ||
| ROIC | 12.61% |
ROA(3y)5.96%
ROA(5y)5.54%
ROE(3y)12.59%
ROE(5y)11.83%
ROIC(3y)9.01%
ROIC(5y)8.58%
1.3 Margins
MWA has a better Profit Margin (10.48%) than 70.08% of its industry peers.
MWA's Profit Margin has improved in the last couple of years.
MWA has a Operating Margin of 17.65%. This is amongst the best in the industry. MWA outperforms 81.89% of its industry peers.
MWA's Operating Margin has improved in the last couple of years.
MWA has a Gross Margin (34.70%) which is in line with its industry peers.
MWA's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.65% | ||
| PM (TTM) | 10.48% | ||
| GM | 34.7% |
OM growth 3Y8.95%
OM growth 5Y2.64%
PM growth 3Y11.63%
PM growth 5Y5.99%
GM growth 3Y2.66%
GM growth 5Y1.04%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so MWA is still creating some value.
The number of shares outstanding for MWA has been increased compared to 1 year ago.
MWA has less shares outstanding than it did 5 years ago.
MWA has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 4.53 indicates that MWA is not in any danger for bankruptcy at the moment.
MWA has a better Altman-Z score (4.53) than 73.23% of its industry peers.
The Debt to FCF ratio of MWA is 2.34, which is a good value as it means it would take MWA, 2.34 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 2.34, MWA is doing good in the industry, outperforming 74.80% of the companies in the same industry.
MWA has a Debt/Equity ratio of 0.51. This is a neutral value indicating MWA is somewhat dependend on debt financing.
MWA's Debt to Equity ratio of 0.51 is in line compared to the rest of the industry. MWA outperforms 42.52% of its industry peers.
Although MWA does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.51 | ||
| Debt/FCF | 2.34 | ||
| Altman-Z | 4.53 |
ROIC/WACC1.33
WACC9.49%
2.3 Liquidity
A Current Ratio of 3.79 indicates that MWA has no problem at all paying its short term obligations.
With an excellent Current ratio value of 3.79, MWA belongs to the best of the industry, outperforming 85.83% of the companies in the same industry.
A Quick Ratio of 2.49 indicates that MWA has no problem at all paying its short term obligations.
MWA's Quick ratio of 2.49 is amongst the best of the industry. MWA outperforms 81.89% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.79 | ||
| Quick Ratio | 2.49 |
3. Growth
3.1 Past
MWA shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 41.25%, which is quite impressive.
Measured over the past years, MWA shows a quite strong growth in Earnings Per Share. The EPS has been growing by 9.36% on average per year.
The Revenue has grown by 10.96% in the past year. This is quite good.
Measured over the past years, MWA shows a small growth in Revenue. The Revenue has been growing by 6.31% on average per year.
EPS 1Y (TTM)41.25%
EPS 3Y20.82%
EPS 5Y9.36%
EPS Q2Q%13.33%
Revenue 1Y (TTM)10.96%
Revenue growth 3Y5.77%
Revenue growth 5Y6.31%
Sales Q2Q%3.08%
3.2 Future
Based on estimates for the next years, MWA will show a quite strong growth in Earnings Per Share. The EPS will grow by 12.98% on average per year.
MWA is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.37% yearly.
EPS Next Y28.59%
EPS Next 2Y18.63%
EPS Next 3Y12.98%
EPS Next 5YN/A
Revenue Next Year8.31%
Revenue Next 2Y6.66%
Revenue Next 3Y5.37%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 22.28, the valuation of MWA can be described as rather expensive.
MWA's Price/Earnings ratio is in line with the industry average.
MWA's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.50.
The Price/Forward Earnings ratio is 18.44, which indicates a rather expensive current valuation of MWA.
Compared to the rest of the industry, the Price/Forward Earnings ratio of MWA is on the same level as its industry peers.
Compared to an average S&P500 Price/Forward Earnings ratio of 36.44, MWA is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.28 | ||
| Fwd PE | 18.44 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MWA is on the same level as its industry peers.
62.20% of the companies in the same industry are more expensive than MWA, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.52 | ||
| EV/EBITDA | 13.74 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
MWA has a very decent profitability rating, which may justify a higher PE ratio.
MWA's earnings are expected to grow with 12.98% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.78
PEG (5Y)2.38
EPS Next 2Y18.63%
EPS Next 3Y12.98%
5. Dividend
5.1 Amount
MWA has a Yearly Dividend Yield of 1.06%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 1.85, MWA pays a bit more dividend than its industry peers.
With a Dividend Yield of 1.06, MWA pays less dividend than the S&P500 average, which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.06% |
5.2 History
The dividend of MWA has a limited annual growth rate of 4.69%.
MWA has paid a dividend for at least 10 years, which is a reliable track record.
MWA has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)4.69%
Div Incr Years10
Div Non Decr Years18
5.3 Sustainability
28.42% of the earnings are spent on dividend by MWA. This is a low number and sustainable payout ratio.
The dividend of MWA is growing, but earnings are growing more, so the dividend growth is sustainable.
DP28.42%
EPS Next 2Y18.63%
EPS Next 3Y12.98%
25.18
-0.19 (-0.75%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners104.59%
Inst Owner Change0%
Ins Owners0.83%
Ins Owner Change-1.59%
Market Cap3.95B
Analysts74
Price Target28.73 (14.1%)
Short Float %2.94%
Short Ratio3.17
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.06% |
Yearly Dividend0.26
Dividend Growth(5Y)4.69%
DP28.42%
Div Incr Years10
Div Non Decr Years18
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)18.31%
Min EPS beat(2)8.59%
Max EPS beat(2)28.03%
EPS beat(4)4
Avg EPS beat(4)20.22%
Min EPS beat(4)1.31%
Max EPS beat(4)42.93%
EPS beat(8)7
Avg EPS beat(8)34.42%
EPS beat(12)8
Avg EPS beat(12)24.99%
EPS beat(16)11
Avg EPS beat(16)21.06%
Revenue beat(2)2
Avg Revenue beat(2)3.1%
Min Revenue beat(2)2.38%
Max Revenue beat(2)3.82%
Revenue beat(4)4
Avg Revenue beat(4)4.88%
Min Revenue beat(4)2.38%
Max Revenue beat(4)7.15%
Revenue beat(8)7
Avg Revenue beat(8)4.29%
Revenue beat(12)9
Avg Revenue beat(12)3.63%
Revenue beat(16)12
Avg Revenue beat(16)4.27%
PT rev (1m)0%
PT rev (3m)-3.43%
EPS NQ rev (1m)-0.5%
EPS NQ rev (3m)-6.08%
EPS NY rev (1m)-0.14%
EPS NY rev (3m)1.23%
Revenue NQ rev (1m)0.17%
Revenue NQ rev (3m)-0.11%
Revenue NY rev (1m)0.14%
Revenue NY rev (3m)0.93%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.28 | ||
| Fwd PE | 18.44 | ||
| P/S | 2.87 | ||
| P/FCF | 20.52 | ||
| P/OCF | 16.1 | ||
| P/B | 4.52 | ||
| P/tB | 8.12 | ||
| EV/EBITDA | 13.74 |
EPS(TTM)1.13
EY4.49%
EPS(NY)1.37
Fwd EY5.42%
FCF(TTM)1.23
FCFY4.87%
OCF(TTM)1.56
OCFY6.21%
SpS8.77
BVpS5.58
TBVpS3.1
PEG (NY)0.78
PEG (5Y)2.38
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.61% | ||
| ROE | 16.47% | ||
| ROCE | 16.89% | ||
| ROIC | 12.61% | ||
| ROICexc | 16.37% | ||
| ROICexgc | 25.19% | ||
| OM | 17.65% | ||
| PM (TTM) | 10.48% | ||
| GM | 34.7% | ||
| FCFM | 14% |
ROA(3y)5.96%
ROA(5y)5.54%
ROE(3y)12.59%
ROE(5y)11.83%
ROIC(3y)9.01%
ROIC(5y)8.58%
ROICexc(3y)10.84%
ROICexc(5y)10.33%
ROICexgc(3y)17.57%
ROICexgc(5y)17.96%
ROCE(3y)12.07%
ROCE(5y)11.49%
ROICexcg growth 3Y8.33%
ROICexcg growth 5Y0.66%
ROICexc growth 3Y15.33%
ROICexc growth 5Y7.3%
OM growth 3Y8.95%
OM growth 5Y2.64%
PM growth 3Y11.63%
PM growth 5Y5.99%
GM growth 3Y2.66%
GM growth 5Y1.04%
F-Score8
Asset Turnover0.82
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.51 | ||
| Debt/FCF | 2.34 | ||
| Debt/EBITDA | 1.51 | ||
| Cap/Depr | 94.61% | ||
| Cap/Sales | 3.84% | ||
| Interest Coverage | 34.63 | ||
| Cash Conversion | 82.19% | ||
| Profit Quality | 133.63% | ||
| Current Ratio | 3.79 | ||
| Quick Ratio | 2.49 | ||
| Altman-Z | 4.53 |
F-Score8
WACC9.49%
ROIC/WACC1.33
Cap/Depr(3y)79.39%
Cap/Depr(5y)92.1%
Cap/Sales(3y)3.91%
Cap/Sales(5y)4.88%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)41.25%
EPS 3Y20.82%
EPS 5Y9.36%
EPS Q2Q%13.33%
EPS Next Y28.59%
EPS Next 2Y18.63%
EPS Next 3Y12.98%
EPS Next 5YN/A
Revenue 1Y (TTM)10.96%
Revenue growth 3Y5.77%
Revenue growth 5Y6.31%
Sales Q2Q%3.08%
Revenue Next Year8.31%
Revenue Next 2Y6.66%
Revenue Next 3Y5.37%
Revenue Next 5YN/A
EBIT growth 1Y42.76%
EBIT growth 3Y15.24%
EBIT growth 5Y9.12%
EBIT Next Year51.65%
EBIT Next 3Y19.48%
EBIT Next 5YN/A
FCF growth 1Y1066.33%
FCF growth 3Y26.75%
FCF growth 5Y100.55%
OCF growth 1Y736.18%
OCF growth 3Y15.08%
OCF growth 5Y20.89%