Financial Survey: Tennant (NYSE:TNC) versus Mueller Water Products (NYSE:MWA)

Mueller Water Products (NYSE:MWA) and Tennant (NYSE:TNC) are both industrials companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.

Risk & Volatility

Mueller Water Products has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500. Comparatively, Tennant has a beta of 1.15, suggesting that its share price is 15% more volatile than the S&P 500.

Insider & Institutional Ownership

91.7% of Mueller Water Products shares are owned by institutional investors. Comparatively, 93.3% of Tennant shares are owned by institutional investors. 1.1% of Mueller Water Products shares are owned by company insiders. Comparatively, 3.5% of Tennant 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.

Dividends

Mueller Water Products pays an annual dividend of $0.28 per share and has a dividend yield of 1.3%. Tennant pays an annual dividend of $1.24 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. Tennant pays out 121.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Mueller Water Products has increased its dividend for 10 consecutive years and Tennant has increased its dividend for 53 consecutive years. Tennant is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Mueller Water Products and Tennant’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%
Tennant	1.50%	13.32%	6.07%

Analyst Recommendations

This is a summary of recent recommendations for Mueller Water Products and Tennant, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mueller Water Products	2	1	2	0	2.00
Tennant	1	2	1	0	2.00

Mueller Water Products currently has a consensus target price of $28.40, suggesting a potential upside of 31.09%. Tennant has a consensus target price of $91.00, suggesting a potential upside of 35.56%. Given Tennant’s higher probable upside, analysts clearly believe Tennant is more favorable than Mueller Water Products.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mueller Water Products	$1.43 billion	2.37	$191.70 million	$1.41	15.37
Tennant	$1.20 billion	0.95	$43.80 million	$1.02	65.81

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

Summary

Mueller Water Products beats Tennant on 9 of the 16 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 Tennant

Tennant Company, together with its subsidiaries, designs, manufactures, and markets floor cleaning equipment in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company offers a suite of products, including floor maintenance and cleaning equipment, detergent-free and other sustainable cleaning technologies, aftermarket parts and consumables, equipment maintenance and repair services, and asset management solutions. It provides business solutions, such as financing, rental, and leasing programs, as well as machine-to-machine asset management solutions. The company offers its products under the Tennant, Nobles, Alfa Uma Empresa Tennant, IPC, Gaomei, and Rongen brands, as well as private-label brands. Its products are used in retail establishments and distribution centers; factories and warehouses; and public venues, such as arenas and stadiums, office buildings, schools and universities, hospitals and clinics, and other environments. The company markets its products to contract cleaners and businesses through direct sales and service organizations, as well as through a network of authorized distributors. Tennant Company was founded in 1870 and is headquartered in Eden Prairie, Minnesota.