Mueller Industries (MLI): Assessing Valuation Following Robust Results and a Fifth Consecutive Dividend Increase

Mueller Industries stock caught attention after management highlighted steady performance despite a slowdown in residential construction and extra imports ahead of tariffs. The company’s recent 25% dividend increase, their fifth consecutive year of growth, underscores ongoing confidence.

See our latest analysis for Mueller Industries.

Mueller Industries’ momentum has been clear, with the stock climbing 22.8% in the past three months and delivering a stellar 28.1% total shareholder return over the past year. Confidence following the consistent dividend growth and ongoing resilience is showing up in the year-to-date share price return of 34.5%. This builds a sense of solid upward trajectory, especially as investors weigh management’s upbeat tone against broader market uncertainty.

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With a strong rally under its belt and dividend hikes maintaining momentum, the key question now is whether Mueller Industries shares are still trading below their true value, or if the market is already pricing in all of this future growth potential.

Price-to-Earnings of 15.9x: Is it justified?

Mueller Industries trades at a price-to-earnings (P/E) ratio of 15.9x, noticeably lower than both its industry peers and the broader US market based on the latest close at $107.26. This suggests the stock is valued attractively relative to comparable companies.

The price-to-earnings ratio measures how much investors are willing to pay today for a dollar of earnings. For an established manufacturer like Mueller Industries, the P/E can provide both a benchmark against competitors and a quick way to evaluate market expectations for future profitability.

In this case, the company’s P/E ratio stands well below the Machinery industry average of 23.9x and the US market average of 18.2x. Even compared to our estimated fair P/E ratio of 21.1x, Mueller Industries looks discounted. This could signal the market is not fully pricing in the company’s robust profit margins, accelerating earnings growth, and impressive return on equity. These metrics could contribute to the valuation moving closer to the fair ratio over time.

Explore the SWS fair ratio for Mueller Industries

Result: Price-to-Earnings of 15.9x (UNDERVALUED)

However, continued sluggish growth in residential construction and unexpected shifts in tariff policy could present challenges for Mueller Industries’ ongoing momentum.

Find out about the key risks to this Mueller Industries narrative.

Another View: What Does the SWS DCF Model Say?

Taking a step back from traditional multiples, our SWS DCF model offers a different perspective. According to this approach, Mueller Industries is currently trading above its estimated fair value of $101.69. This suggests the market may be factoring in more optimism than fundamentals support, or perhaps there are variables the model cannot fully capture. Could this gap signal caution, or is there underlying strength the model overlooks?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Mueller Industries for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 844 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Mueller Industries Narrative

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A great starting point for your Mueller Industries research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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