Reviewing AGCO (NYSE:AGCO) & Mueller Industries (NYSE:MLI)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
AGCO	2.76%	9.66%	3.39%
Mueller Industries	17.26%	25.23%	21.32%

Analyst Ratings

This is a summary of recent ratings and price targets for AGCO and Mueller Industries, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AGCO	2	7	5	0	2.21
Mueller Industries	0	0	3	0	3.00

AGCO presently has a consensus price target of $123.67, suggesting a potential upside of 8.74%. Mueller Industries has a consensus price target of $75.50, suggesting a potential upside of 37.34%. Given Mueller Industries’ stronger consensus rating and higher probable upside, analysts plainly believe Mueller Industries is more favorable than AGCO.

Volatility & Risk

AGCO has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500. Comparatively, Mueller Industries has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500.

Insider & Institutional Ownership

78.8% of AGCO shares are owned by institutional investors. Comparatively, 94.5% of Mueller Industries shares are owned by institutional investors. 0.6% of AGCO 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 stock will outperform the market over the long term.

Valuation & Earnings

This table compares AGCO and Mueller Industries”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AGCO	$10.08 billion	0.78	$726.50 million	$3.89	29.24
Mueller Industries	$4.18 billion	2.87	$765.19 million	$3.90	14.10

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

Dividends

AGCO pays an annual dividend of $1.20 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%. AGCO pays out 30.8% 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. AGCO has raised its dividend for 12 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.

Summary

Mueller Industries beats AGCO on 12 of the 17 factors compared between the two stocks.

About AGCO

AGCO Corporation designs, manufactures and distributes agricultural equipment and technology for farmers around the world. Its products include tractors, combines, hay and forage equipment, sprayers, seeding and tillage equipment, grain storage systems, and precision agriculture solutions. The company’s brands include Fendt, Massey Ferguson, Valtra, and PTx, its precision agriculture business. AGCO was formed in 1990 and is headquartered in Duluth, Georgia. AGCO serves agricultural markets globally through a network of dealers and other distribution partners.

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.