Financial Review: Mueller Industries (NYSE:MLI) versus Franklin Electric (NASDAQ:FELE)

Franklin Electric (NASDAQ:FELE) and Mueller Industries (NYSE:MLI) are both industrials companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, earnings, dividends and risk.

Profitability

This table compares Franklin Electric and Mueller Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Franklin Electric	8.83%	15.45%	9.78%
Mueller Industries	17.26%	25.23%	21.32%

Dividends

Franklin Electric pays an annual dividend of $1.12 per share and has a dividend yield of 1.1%. Mueller Industries pays an annual dividend of $0.70 per share and has a dividend yield of 1.3%. Franklin Electric pays out 25.2% of its earnings in the form of a dividend. Mueller Industries pays out 17.9% 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. Franklin Electric has raised its dividend for 33 consecutive years and Mueller Industries has raised its dividend for 5 consecutive years. Mueller Industries is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Franklin Electric and Mueller Industries”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Franklin Electric	$2.13 billion	2.03	$147.09 million	$4.45	22.05
Mueller Industries	$4.18 billion	2.86	$765.19 million	$3.90	14.04

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

Institutional and Insider Ownership

80.0% of Franklin Electric shares are owned by institutional investors. Comparatively, 94.5% of Mueller Industries shares are owned by institutional investors. 2.9% of Franklin Electric shares are owned by company insiders. Comparatively, 2.3% of Mueller Industries shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Franklin Electric and Mueller Industries, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Franklin Electric	0	2	1	1	2.75
Mueller Industries	0	0	3	0	3.00

Franklin Electric currently has a consensus target price of $132.50, indicating a potential upside of 35.03%. Mueller Industries has a consensus target price of $75.50, indicating a potential upside of 37.93%. Given Mueller Industries’ stronger consensus rating and higher possible upside, analysts plainly believe Mueller Industries is more favorable than Franklin Electric.

Volatility & Risk

Franklin Electric has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500. Comparatively, Mueller Industries has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500.

Summary

Mueller Industries beats Franklin Electric on 12 of the 18 factors compared between the two stocks.

About Franklin Electric

Franklin Electric is a global manufacturer of systems and components used to move water and fuel. Founded in 1944 and headquartered in Fort Wayne, Indiana, the company serves residential, commercial, agricultural, municipal and industrial markets. Its water-related products include submersible motors and pumps, groundwater and wastewater systems, water treatment equipment, and controls and drives. Franklin Electric also supplies pumping and related equipment for applications such as pressure boosting, irrigation and dewatering.

About Mueller Industries

Mueller Industries, Inc. manufactures and markets products used in plumbing, heating, ventilation and air conditioning (HVAC), refrigeration, and industrial applications. Its products include copper tube and fittings, valves, line sets, brass rod and forgings, and plastic plumbing products. The company serves customers across a range of markets, including construction, HVAC and refrigeration, automotive, and industrial manufacturing. Its operations and sales reach North America and international markets, including Europe and Asia.