Mueller Water Products (NYSE: MWA) and Comfort Systems USA (NYSE:FIX) are both small-cap industrial products companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, risk, earnings, valuation and analyst recommendations.

Profitability

This table compares Mueller Water Products and Comfort Systems USA’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mueller Water Products 14.93% 15.83% 5.74%
Comfort Systems USA 3.76% 16.49% 8.14%

Insider & Institutional Ownership

84.4% of Mueller Water Products shares are held by institutional investors. Comparatively, 94.2% of Comfort Systems USA shares are held by institutional investors. 4.3% of Mueller Water Products shares are held by company insiders. Comparatively, 3.5% of Comfort Systems USA shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Dividends

Mueller Water Products pays an annual dividend of $0.16 per share and has a dividend yield of 1.3%. Comfort Systems USA pays an annual dividend of $0.30 per share and has a dividend yield of 0.7%. Mueller Water Products pays out 21.1% of its earnings in the form of a dividend. Comfort Systems USA pays out 17.4% 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 increased its dividend for 2 consecutive years and Comfort Systems USA has increased its dividend for 4 consecutive years.

Analyst Recommendations

This is a summary of recent recommendations for Mueller Water Products and Comfort Systems USA, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mueller Water Products 0 2 6 0 2.75
Comfort Systems USA 0 4 1 0 2.20

Mueller Water Products presently has a consensus price target of $13.75, indicating a potential upside of 14.58%. Comfort Systems USA has a consensus price target of $63.00, indicating a potential upside of 55.75%. Given Comfort Systems USA’s higher probable upside, analysts plainly believe Comfort Systems USA is more favorable than Mueller Water Products.

Earnings & Valuation

This table compares Mueller Water Products and Comfort Systems USA’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Mueller Water Products $826.00 million 2.30 $123.30 million $0.76 15.79
Comfort Systems USA $1.63 billion 0.92 $64.89 million $1.72 23.52

Mueller Water Products has higher revenue, but lower earnings than Comfort Systems USA. Mueller Water Products is trading at a lower price-to-earnings ratio than Comfort Systems USA, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Mueller Water Products has a beta of 1.32, meaning that its stock price is 32% more volatile than the S&P 500. Comparatively, Comfort Systems USA has a beta of 1.31, meaning that its stock price is 31% more volatile than the S&P 500.

Summary

Mueller Water Products beats Comfort Systems USA on 9 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.

About Comfort Systems USA

Comfort Systems USA, Inc. is a provider of mechanical contracting services, which principally includes heating, ventilation and air conditioning (HVAC), plumbing, piping and controls, as well as off-site construction, electrical, monitoring and fire protection. As of December 31, 2016, the Company installed, maintained, repaired and replaced products and systems throughout its 35 operating units in 84 cities and 91 locations throughout the United States. The Company operates primarily in the commercial, industrial and institutional HVAC markets and offers services in the industrial, healthcare, education, office, technology, retail and government facilities. The Company provides a range of construction, renovation, expansion, maintenance, repair and replacement services for mechanical and related systems in commercial, industrial and institutional properties. The Company also provides remote monitoring of temperature, pressure, humidity and air flow for HVAC systems.

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