Mueller Water Products Case Analysis

Mueller Water Product’s Future Success or Failure In my estimation, Mueller Water Products will be around for a while as evidenced by their stock performance, their strong financial ratios, and current industry market forecasts. One of the keys indicators of a successful company is the consistent performance in the stock market. In the last three years, Mueller Water Products have not had much variability in their stock price which is a good indication of their steady presence in the market place (Annual Report Pursuant to Section 13 or 15(d), 2016). Another good indicator that Mueller Water Products will be successful in the future is the performance of their key financial ratios such as earnings per share (EPS), liquidity ratios, debt ratios, return on assets (ROA), and return on equity (ROE). With EPS measuring success as how much of the companies net income has been earned by their common stock, the larger the ratio, the better. Mueller Water Product’s ROA has been steady for the last three years not varying more than $0.02 …show more content…
In the case of Mueller Water Products, their 2016 annual report cites the U.S Bureau of Economic Analysis as having seen an increase in municipal spending year over year in 2016 with an economic forecast predicting this trend to continue into 2017. Their 2016 annual report also cites the U.S. Department of Labor showing a twelve months price index increase in both water and sewage rates at 3.8% for 2016 over 2015. As a company that deals with water infrastructure, a key indicator for demand, and therefore short-term success, is the year over year percent change in the housing sector. According to Mueller Water Product’s 2016 annual report, Zelmen & Associates are forecasting a 7% increase in the housing market for 2017 (Annual Report Pursuant to Section 13 or 15(d),