Head-To-Head Contrast: Mueller Industries (MLI) versus Quanex (NX)

Mueller Industries (NYSE: MLI) and Quanex (NYSE:NX) are both small-cap industrial products companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, earnings, analyst recommendations, dividends, profitability, institutional ownership and valuation.

Analyst Recommendations

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This is a breakdown of recent ratings and recommmendations for Mueller Industries and Quanex, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mueller Industries 0 0 0 0 N/A
Quanex 0 2 1 0 2.33

Quanex has a consensus target price of $25.00, indicating a potential upside of 41.64%. Given Quanex’s higher possible upside, analysts plainly believe Quanex is more favorable than Mueller Industries.

Risk & Volatility

Mueller Industries has a beta of 1.42, meaning that its share price is 42% more volatile than the S&P 500. Comparatively, Quanex has a beta of 0.81, meaning that its share price is 19% less volatile than the S&P 500.

Dividends

Mueller Industries pays an annual dividend of $0.40 per share and has a dividend yield of 1.5%. Quanex pays an annual dividend of $0.16 per share and has a dividend yield of 0.9%. Quanex pays out 20.8% of its earnings in the form of a dividend. Mueller Industries has raised 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.

Profitability

This table compares Mueller Industries and Quanex’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mueller Industries 3.78% 16.47% 6.62%
Quanex 3.17% 6.72% 3.45%

Institutional and Insider Ownership

93.4% of Mueller Industries shares are held by institutional investors. 2.8% of Mueller Industries shares are held by company insiders. Comparatively, 5.3% of Quanex shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Mueller Industries and Quanex’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Mueller Industries $2.27 billion 0.69 $85.59 million N/A N/A
Quanex $866.55 million 0.71 $18.68 million $0.77 22.92

Mueller Industries has higher revenue and earnings than Quanex.

Summary

Mueller Industries beats Quanex on 10 of the 15 factors compared between the two stocks.

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.

Quanex Company Profile

Quanex Building Products Corporation, together with its subsidiaries, provides components for the fenestration industry worldwide. It operates through three segments: North American Engineered Components, European Engineered Components, and North American Cabinet Components. The company offers flexible insulating glass spacers; extruded vinyl profiles; window and door screens; cabinet doors and other components for original equipment manufacturers (OEMs) in the kitchen and bathroom cabinet industry; and precision-formed metal and wood products, as well as solar panel sealants, trim moldings, vinyl decking and fencing products, water retention barriers, and conservatory roof components. It sells its products to OEMs in the building products industry through sales representatives, direct sales force, distributors, and independent sales agents. The company is headquartered in Houston, Texas.

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