Critical Analysis: ARC Group WorldWide (ARCW) versus Mueller Water Products (MWA)

ARC Group WorldWide (NASDAQ: ARCW) and Mueller Water Products (NYSE:MWA) are both small-cap computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, risk, dividends, profitability, institutional ownership and valuation.

Insider & Institutional Ownership

20.2% of ARC Group WorldWide shares are owned by institutional investors. Comparatively, 84.5% of Mueller Water Products shares are owned by institutional investors. 3.6% of ARC Group WorldWide shares are owned by insiders. Comparatively, 3.0% of Mueller Water Products shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Volatility and Risk

ARC Group WorldWide has a beta of 3.25, suggesting that its share price is 225% more volatile than the S&P 500. Comparatively, Mueller Water Products has a beta of 1.19, suggesting that its share price is 19% more volatile than the S&P 500.

Earnings and Valuation

This table compares ARC Group WorldWide and Mueller Water Products’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ARC Group WorldWide $99.07 million 0.59 -$10.19 million N/A N/A
Mueller Water Products $826.00 million 2.21 $123.30 million $0.44 26.25

Mueller Water Products has higher revenue and earnings than ARC Group WorldWide.

Profitability

This table compares ARC Group WorldWide and Mueller Water Products’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ARC Group WorldWide -25.99% -33.33% -11.25%
Mueller Water Products 12.47% 15.34% 6.26%

Analyst Ratings

This is a summary of recent ratings and recommmendations for ARC Group WorldWide and Mueller Water Products, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ARC Group WorldWide 0 0 0 0 N/A
Mueller Water Products 1 2 4 0 2.43

Mueller Water Products has a consensus price target of $13.67, suggesting a potential upside of 18.33%. Given Mueller Water Products’ higher possible upside, analysts plainly believe Mueller Water Products is more favorable than ARC Group WorldWide.

Dividends

Mueller Water Products pays an annual dividend of $0.20 per share and has a dividend yield of 1.7%. ARC Group WorldWide does not pay a dividend. Mueller Water Products pays out 45.5% of its earnings in the form of a dividend. Mueller Water Products has increased its dividend for 3 consecutive years.

Summary

Mueller Water Products beats ARC Group WorldWide on 11 of the 14 factors compared between the two stocks.

About ARC Group WorldWide

ARC Group Worldwide, Inc. provides metal injection molding and metal 3D printing solutions worldwide. It operates in three segments: Precision Components Group, Stamping Group, and 3DMT Group. The Precision Components Group segment provides engineered precision metal components using processes consisting of metal injection molding; tooling products; and plastic injection molding products. This segment serves industries, including aerospace, automotive, consumer durables, electronic devices, firearms and defense, and medical and dental devices. The Stamping Group segment engages in precision metal stamping business that offers value-added secondary design and production processing. The 3DMT Group segment provides 3D printing, including metal 3D printing solutions; and additives. ARC Group Worldwide, Inc. was founded in 1987 and is based in Deland, Florida.

About Mueller Water Products

Mueller Water Products, Inc. manufactures and markets products and services for use in the transmission, distribution, and measurement of water in the United States, Canada, and internationally. It operates through Infrastructure and Technologies segments. The Infrastructure segment offers valves for water and gas systems, including iron gate, butterfly, tapping, check, knife, plug, automatic control, and ball valves; dry-barrel and wet-barrel fire hydrants; pipe repair products, such as clamps and couplings used to repair leaks under the Mueller and Jones brand names; small valves, meter bars, and line stopper fittings for use in gas systems; and machines and tools for tapping, drilling, extracting, installing, and stopping-off. This segment sells its products primarily through waterworks distributors to various end user customers, including municipalities, water and wastewater utilities, gas utilities, and fire protection and construction contractors. The Technologies segment provides residential and commercial water metering products and systems; and leak detection and pipe condition assessment products and services primarily to municipalities and waterworks distributors, as well as to end users. Mueller Water Products, Inc. is headquartered in Atlanta, Georgia.

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