MUELLER WATER PRODUCTS INC-A (MWA) Stock Fundamental Analysis
NYSE:MWA - New York Stock Exchange, Inc. - US6247581084 - Common Stock - Currency: USD
Overall MWA gets a fundamental rating of 7 out of 10. We evaluated MWA against 128 industry peers in the Machinery industry. MWA gets an excellent profitability rating and is at the same time showing great financial health properties. MWA has a decent growth rate and is not valued too expensively. These ratings would make MWA suitable for quality investing!
1. Profitability
1.1 Basic Checks
In the past year MWA was profitable.
In the past year MWA had a positive cash flow from operations.
Each year in the past 5 years MWA has been profitable.
Each year in the past 5 years MWA had a positive operating cash flow.
1.2 Ratios
With a decent Return On Assets value of 8.61%, MWA is doing good in the industry, outperforming 75.00% of the companies in the same industry.
Looking at the Return On Equity, with a value of 16.47%, MWA is in the better half of the industry, outperforming 74.22% of the companies in the same industry.
MWA's Return On Invested Capital of 12.61% is fine compared to the rest of the industry. MWA outperforms 78.91% 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 10.67%.
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
With a decent Profit Margin value of 10.48%, MWA is doing good in the industry, outperforming 68.75% of the companies in the same industry.
In the last couple of years the Profit Margin of MWA has grown nicely.
With an excellent Operating Margin value of 17.65%, MWA belongs to the best of the industry, outperforming 82.03% of the companies in the same industry.
In the last couple of years the Operating Margin of MWA has grown nicely.
The Gross Margin of MWA (34.70%) is better than 60.94% of its industry peers.
In the last couple of years the Gross Margin of MWA has remained more or less at the same level.
| 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.
Compared to 1 year ago, MWA has an improved debt to assets ratio.
2.2 Solvency
MWA has an Altman-Z score of 4.40. This indicates that MWA is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 4.40, MWA is doing good in the industry, outperforming 70.31% of the companies in the same industry.
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 72.66% 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 42.97% 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 | 4.4 |
ROIC/WACC1.34
WACC9.39%
2.3 Liquidity
A Current Ratio of 3.79 indicates that MWA has no problem at all paying its short term obligations.
MWA has a Current ratio of 3.79. This is amongst the best in the industry. MWA outperforms 85.94% of its industry peers.
A Quick Ratio of 2.49 indicates that MWA has no problem at all paying its short term obligations.
MWA has a better Quick ratio (2.49) than 82.03% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.79 | ||
| Quick Ratio | 2.49 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 41.25% over the past year.
MWA shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 9.36% yearly.
The Revenue has grown by 10.96% in the past year. This is quite good.
MWA shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.31% yearly.
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
The Earnings Per Share is expected to grow by 12.98% on average over the next years. This is quite good.
The Revenue is expected to grow by 5.37% on average over the next years.
EPS Next Y28.77%
EPS Next 2Y18.12%
EPS Next 3Y12.98%
EPS Next 5YN/A
Revenue Next Year8%
Revenue Next 2Y6.63%
Revenue Next 3Y5.37%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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
The Price/Earnings ratio is 21.50, which indicates a rather expensive current valuation of MWA.
MWA's Price/Earnings is on the same level as the industry average.
MWA is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 26.29, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 17.95, MWA is valued on the expensive side.
MWA's Price/Forward Earnings is on the same level as the industry average.
MWA's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.17.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.5 | ||
| Fwd PE | 17.95 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as MWA.
MWA's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. MWA is cheaper than 64.84% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.79 | ||
| EV/EBITDA | 13.17 |
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.
The excellent profitability rating of MWA 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)0.75
PEG (5Y)2.3
EPS Next 2Y18.12%
EPS Next 3Y12.98%
5. Dividend
5.1 Amount
MWA has a Yearly Dividend Yield of 1.09%. Purely for dividend investing, there may be better candidates out there.
MWA's Dividend Yield is a higher than the industry average which is at 1.90.
With a Dividend Yield of 1.09, MWA pays less dividend than the S&P500 average, which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.09% |
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 2Y18.12%
EPS Next 3Y12.98%
24.29
-0.24 (-0.98%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners96.09%
Inst Owner Change12%
Ins Owners0.84%
Ins Owner Change1.85%
Market Cap3.81B
Analysts74
Price Target29.24 (20.38%)
Short Float %4.76%
Short Ratio2.65
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.09% |
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)-1.71%
PT rev (3m)-0.58%
EPS NQ rev (1m)-5.61%
EPS NQ rev (3m)-5.61%
EPS NY rev (1m)1.37%
EPS NY rev (3m)1.37%
Revenue NQ rev (1m)-0.18%
Revenue NQ rev (3m)-0.18%
Revenue NY rev (1m)0.65%
Revenue NY rev (3m)0.65%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.5 | ||
| Fwd PE | 17.95 | ||
| P/S | 2.77 | ||
| P/FCF | 19.79 | ||
| P/OCF | 15.53 | ||
| P/B | 4.36 | ||
| P/tB | 7.83 | ||
| EV/EBITDA | 13.17 |
EPS(TTM)1.13
EY4.65%
EPS(NY)1.35
Fwd EY5.57%
FCF(TTM)1.23
FCFY5.05%
OCF(TTM)1.56
OCFY6.44%
SpS8.77
BVpS5.58
TBVpS3.1
PEG (NY)0.75
PEG (5Y)2.3
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 | 4.4 |
F-Score8
WACC9.39%
ROIC/WACC1.34
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 Y28.77%
EPS Next 2Y18.12%
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%
Revenue Next 2Y6.63%
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%