Snap-On (NYSE: SNA) and Mueller Water Products (NYSE:MWA) are both industrials companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, valuation, analyst recommendations, risk, institutional ownership, earnings and profitability.

Risk & Volatility

Snap-On has a beta of 1.12, meaning that its stock price is 12% more volatile than the S&P 500. Comparatively, Mueller Water Products has a beta of 1.32, meaning that its stock price is 32% more volatile than the S&P 500.

Valuation and Earnings

This table compares Snap-On and Mueller Water Products’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Snap-On $3.43 billion 2.68 $546.40 million $9.73 16.58
Mueller Water Products $826.00 million 2.35 $123.30 million $0.34 36.06

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

Institutional and Insider Ownership

98.8% of Snap-On shares are held by institutional investors. Comparatively, 84.0% of Mueller Water Products shares are held by institutional investors. 3.7% of Snap-On shares are held by insiders. Comparatively, 4.3% of Mueller Water Products shares are held by 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.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Snap-On and Mueller Water Products, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Snap-On 0 2 7 0 2.78
Mueller Water Products 0 2 6 0 2.75

Snap-On presently has a consensus price target of $192.00, suggesting a potential upside of 18.98%. Mueller Water Products has a consensus price target of $13.75, suggesting a potential upside of 12.15%. Given Snap-On’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Snap-On is more favorable than Mueller Water Products.

Dividends

Snap-On pays an annual dividend of $3.28 per share and has a dividend yield of 2.0%. Mueller Water Products pays an annual dividend of $0.16 per share and has a dividend yield of 1.3%. Snap-On pays out 33.7% of its earnings in the form of a dividend. Mueller Water Products pays out 47.1% 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. Snap-On has raised its dividend for 2 consecutive years and Mueller Water Products has raised its dividend for 7 consecutive years. Snap-On is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Snap-On and Mueller Water Products’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Snap-On 15.95% 20.82% 11.72%
Mueller Water Products 14.93% 15.83% 5.74%

Summary

Snap-On beats Mueller Water Products on 13 of the 17 factors compared between the two stocks.

Snap-On Company Profile

Snap-on Incorporated is a manufacturer and marketer of tools, equipment, diagnostics, repair information and systems solutions. The Company’s segments include the Commercial & Industrial Group, the Snap-on Tools Group, the Repair Systems & Information Group, and Financial Services. The Commercial & Industrial Group consists of business operations serving a range of industrial and commercial customers, including customers in the aerospace, natural resources, government, power generation, transportation and technical education markets. The Snap-on Tools Group consists of business operations primarily serving vehicle service and repair technicians. The Repair Systems & Information Group consists of business operations serving other professional vehicle repair customers, primarily owners and managers of independent repair shops and original equipment manufacturer (OEM) dealership service and repair shops. Financial Services consists of the business operations of its finance subsidiaries.

Mueller Water Products Company Profile

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.

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