Critical Review: Shengkai Innovations (VALV) and Mueller Water Products (MWA)

Shengkai Innovations (OTCMKTS:VALV) and Mueller Water Products (NYSE:MWA) are both small-cap industrial products companies, but which is the better business? We will compare the two businesses based on the strength of their risk, earnings, profitability, dividends, valuation, analyst recommendations and institutional ownership.

Dividends

Mueller Water Products pays an annual dividend of $0.20 per share and has a dividend yield of 2.0%. Shengkai Innovations does not pay a dividend. Mueller Water Products pays out 37.7% of its earnings in the form of a dividend. Mueller Water Products has increased its dividend for 3 consecutive years.

Insider & Institutional Ownership

86.0% of Mueller Water Products shares are held by institutional investors. 0.2% of Shengkai Innovations shares are held by insiders. Comparatively, 3.0% of Mueller Water Products shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Shengkai Innovations N/A N/A N/A N/A N/A
Mueller Water Products $916.00 million 1.72 $105.60 million $0.53 18.91

Mueller Water Products has higher revenue and earnings than Shengkai Innovations.

Risk and Volatility

Shengkai Innovations has a beta of 1.98, meaning that its share price is 98% more volatile than the S&P 500. Comparatively, Mueller Water Products has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500.

Profitability

This table compares Shengkai Innovations and Mueller Water Products’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Shengkai Innovations N/A N/A N/A
Mueller Water Products 11.53% 15.62% 6.80%

Analyst Recommendations

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Shengkai Innovations 0 0 0 0 N/A
Mueller Water Products 1 3 3 0 2.29

Mueller Water Products has a consensus target price of $13.10, indicating a potential upside of 30.74%. Given Mueller Water Products’ higher probable upside, analysts clearly believe Mueller Water Products is more favorable than Shengkai Innovations.

Summary

Mueller Water Products beats Shengkai Innovations on 10 of the 12 factors compared between the two stocks.

Shengkai Innovations Company Profile

Shengkai Innovations, Inc., together with its subsidiaries, designs, manufactures, and distributes ceramic valves for industrial use in the People's Republic of China. The company provides ceramic valves in various categories, including gate, ball, back, adjustable, cut-off, and special valves. It also offers various services related to industrial ceramic valves consisting of manufacture, installation, and maintenance of general industrial ceramic valves, as well as the design and manufacture of a range of non-standard ceramic valves. The company sells its products through direct sales personnel and agents to electric power, petrochemical, chemical, aluminum, and metallurgy industries. Shengkai Innovations, Inc. also exports its products to Europe, North America, the Middle East, and the Asia-Pacific region. The company is headquartered in Tianjin, the People's Republic of China.

Mueller Water Products Company Profile

Mueller Water Products, Inc. manufactures and markets products and services for use in the transmission, distribution, and measurement of water in the United States, Canada, and internationally. It operates through Infrastructure and Technologies segments. The Infrastructure segment offers valves for water and gas systems, including iron gate, butterfly, tapping, check, knife, plug, automatic control, and ball valves; dry-barrel and wet-barrel fire hydrants; pipe repair products, such as clamps and couplings used to repair leaks under the Mueller and Jones brand names; small valves, meter bars, and line stopper fittings for use in gas systems; and machines and tools for tapping, drilling, extracting, installing, and stopping-off. This segment sells its products primarily through waterworks distributors to various end user customers, including municipalities, water and wastewater utilities, gas utilities, and fire protection and construction contractors. The Technologies segment provides residential and commercial water metering products and systems; and leak detection and pipe condition assessment products and services primarily to municipalities and waterworks distributors, as well as to end users. Mueller Water Products, Inc. is headquartered in Atlanta, Georgia.

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