Oshkosh (NYSE:OSK) vs. Mueller Water Products (NYSE:MWA) Critical Review

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

Institutional & Insider Ownership

91.7% of Mueller Water Products shares are owned by institutional investors. Comparatively, 92.4% of Oshkosh shares are owned by institutional investors. 1.1% of Mueller Water Products shares are owned by company insiders. Comparatively, 0.6% of Oshkosh shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

Mueller Water Products has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500. Comparatively, Oshkosh has a beta of 1.26, suggesting that its stock price is 26% more volatile than the S&P 500.

Dividends

Mueller Water Products pays an annual dividend of $0.28 per share and has a dividend yield of 1.3%. Oshkosh pays an annual dividend of $2.28 per share and has a dividend yield of 1.8%. Mueller Water Products pays out 19.9% of its earnings in the form of a dividend. Oshkosh pays out 26.1% 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. Mueller Water Products has raised its dividend for 10 consecutive years and Oshkosh has raised its dividend for 13 consecutive years. Oshkosh is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Mueller Water Products and Oshkosh, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mueller Water Products	2	1	2	0	2.00
Oshkosh	0	6	11	0	2.65

Mueller Water Products currently has a consensus price target of $27.40, suggesting a potential upside of 26.42%. Oshkosh has a consensus price target of $168.29, suggesting a potential upside of 34.52%. Given Oshkosh’s stronger consensus rating and higher probable upside, analysts clearly believe Oshkosh is more favorable than Mueller Water Products.

Earnings and Valuation

This table compares Mueller Water Products and Oshkosh”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mueller Water Products	$1.48 billion	2.29	$191.70 million	$1.41	15.37
Oshkosh	$10.42 billion	0.74	$647.00 million	$8.74	14.31

Oshkosh has higher revenue and earnings than Mueller Water Products. Oshkosh 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Mueller Water Products	15.02%	23.55%	13.12%
Oshkosh	5.24%	12.95%	5.86%

Summary

Oshkosh beats Mueller Water Products on 10 of the 17 factors compared between the two stocks.

About Mueller Water Products

Mueller Water Products, Inc. manufactures and markets products and services for the transmission, distribution, and measurement of water used by municipalities, and the residential and non-residential construction industries in the United States, Israel, and internationally. It operates in two segments, Water Flow Solutions and Water Management Solutions. The Water Flow Solutions segment provides valves for water systems, such as iron gate, butterfly, tapping, check, knife, plug, and ball valves, which are used to control distribution and transmission of potable water and non-potable water, as well as in water transmission or distribution, water treatment facilities, or industrial applications. It also offers service brass products. The Water Management Solutions segment offers dry-barrel and wet-barrel fire hydrants for water infrastructure development; fire protection systems, and water infrastructure repair and replacement projects; pipe repair products, such as couplings, grips, and clamps used to repair leaks; residential, fire line, and commercial water metering products, systems, and services; water leak detection and pipe condition assessment products and services; machines and tools for tapping, drilling, extracting, installing, and stopping-off; gas valve products for use in gas distribution systems; and intelligent water solutions, including pressure control valves, advanced pressure management, network analytics, event management, and date logging. It sells its products under the Canada Valve, Centurion, Ez-Max, Hydro Gate, Hydro-Guard, HYMAX, HYMAX VERSA, Jones, Krausz, Milliken, Mueller, Pratt, Pratt Industrial, Repamax, Repaflex, Singer, Echologics, Echoshore, ePulse, Hersey, LeakFinderRT, LeakFinderST, LeakListener, LeakTuner, Mi.Echo, Mi.Net, Mueller Systems, Sentryx, and U.S. Pipe Valve and Hydrant brands. Mueller Water Products, Inc. was founded in 1857 and is headquartered in Atlanta, Georgia.

About Oshkosh

Oshkosh Corporation provides purpose-built vehicles and equipment worldwide. The company operates through three segments: Access, Defense, and Vocational segment. Its Access Equipment segment design and manufacture aerial work platform and telehandlers for use in construction, industrial, and maintenance applications; offers financing and leasing solutions including rental fleet loans, leases, and floor plan and retail financing; and towing and recovery equipment, which includes carriers, wreckers, and rotators, as well as provides equipment installation and sale of chassis and service parts. The Defense segment engages in the manufacture and sale of heavy, medium, and light tactical wheeled vehicles and related services for department of defense. Its Vocational segment offers custom and commercial firefighting equipment, fire apparatus, and emergency vehicles, including pumpers, aerial platform, ladder and tiller trucks, and tankers; light, medium, and heavy-duty rescue vehicles; and wildland rough terrain response, bomb squad, hazardous materials control vehicles, mobile command and control centers, and other emergency response vehicles. Additionally, this segment produces and sells custom and commercial firefighting vehicles, as well as command vehicles, ARFF vehicles; design and manufacture refuse collection vehicles for waste services industry; front discharge concrete mixers for the concrete ready-mix industry; and field service vehicles and truck-mounted cranes for construction, equipment dealer, building supply, utility, tire service, railroad, and mining industries. Further, the company provides its products through direct sales representatives, dealers, and distributors. Oshkosh Corporation was formerly known as Oshkosh Truck Corporation. The company was founded in 1917 and is headquartered in Oshkosh, Wisconsin.