Arconic (NYSE: ARNC) and Mueller Industries (NYSE:MLI) are both basic materials companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, profitability, institutional ownership, risk, analyst recommendations, earnings and valuation.
This table compares Arconic and Mueller Industries’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of current ratings for Arconic and Mueller Industries, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Arconic presently has a consensus target price of $29.78, indicating a potential upside of 32.11%. Given Arconic’s higher possible upside, equities research analysts clearly believe Arconic is more favorable than Mueller Industries.
Valuation and Earnings
This table compares Arconic and Mueller Industries’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Arconic||$12.96 billion||0.84||-$74.00 million||$1.22||18.48|
|Mueller Industries||$2.27 billion||0.66||$85.59 million||N/A||N/A|
Mueller Industries has lower revenue, but higher earnings than Arconic.
Arconic pays an annual dividend of $0.24 per share and has a dividend yield of 1.1%. Mueller Industries pays an annual dividend of $0.40 per share and has a dividend yield of 1.5%. Arconic pays out 19.7% of its earnings in the form of a dividend. Mueller Industries has increased its dividend for 6 consecutive years. Mueller Industries is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk and Volatility
Arconic has a beta of 1.13, indicating that its share price is 13% more volatile than the S&P 500. Comparatively, Mueller Industries has a beta of 1.42, indicating that its share price is 42% more volatile than the S&P 500.
Insider & Institutional Ownership
80.5% of Arconic shares are owned by institutional investors. Comparatively, 93.4% of Mueller Industries shares are owned by institutional investors. 0.1% of Arconic shares are owned by company insiders. Comparatively, 2.8% of Mueller Industries shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Mueller Industries beats Arconic on 10 of the 15 factors compared between the two stocks.
Arconic Company Profile
Arconic Inc. engineers, manufactures, and sells lightweight metals of aluminum, titanium, and nickel worldwide. It operates through three segments: Engineered Products and Solutions, Global Rolled Products, and Transportation and Construction Solutions. The Engineered Products and Solutions produces and sells fastening systems and seamless rolled rings; investment castings, including airfoils and forged jet engine components; and extruded, machined, and formed aircraft parts, as well as various forged, extruded, and machined metal products. This segment serves commercial and defense aerospace, commercial transportation, and power generation end markets. The Global Rolled Products segment produces and sells aluminum sheets and plates; and aseptic foils. This segment serves commercial and defense aerospace, commercial transportation, and power generation end markets. The Transportation and Construction Solutions segment produces and sells integrated aluminum structural systems, architectural extrusions, and forged aluminum commercial vehicle wheels, as well as aluminum products for the industrial products end market. This segment serves nonresidential building and construction, and commercial transportation end markets. The company sells its products directly to customers and through distributors. Arconic Inc. was founded in 2016 and is based in New York, New York.
Mueller Industries Company Profile
Mueller Industries, Inc. manufactures and sells copper, brass, aluminum, and plastic products in the United States, the United Kingdom, Canada, Asia, and Mexico. Its Piping Systems segment manufactures copper tubes and fittings, plastic fittings, line sets, and related components for water distribution system, heating system, air-conditioning, and refrigeration applications, as well as drainage, waste, and vent systems. It also manufactures steel pipe nipples; and resells imported brass and plastic plumbing valves, malleable iron fittings, faucets, and plumbing specialty products. This segment sells its products primarily to plumbing, refrigeration, and air-conditioning wholesalers; and hardware wholesalers and co-ops, building product retailers, and air-conditioning original equipment manufacturers (OEMs) through its sales offices and distribution centers, and agents. The company's Industrial Metals segment manufactures and sells brass, bronze, and copper alloy rods; cold-formed aluminum and copper products for automotive, military ordnance, aerospace, and general manufacturing industries; brass and aluminum forgings for automotive components, brass fittings, industrial machinery, valve bodies, gear blanks, and computer hardware; and brass, aluminum, and stainless steel valves, as well as fluid control systems and gas train assembles for compressed gas, pharmaceutical, construction, and gas appliance markets. Its Climate segment offers valves, protection devices, and brass fittings, as well as tubular assemblies and fabrications for various OEMs in the commercial heating, ventilation, and air-conditioning (HVAC) and refrigeration markets; components and accessories for the air-conditioning and refrigeration markets; and coaxial heat exchangers and twisted tubes for HVAC, geothermal, refrigeration, swimming pool heat pump, marine, ice machine, commercial boiler, and heat reclamation markets. The company was founded in 1900 and is headquartered in Memphis, Tennessee.
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