Mueller Water Products, Inc. (NYSE:MWA) has faced a significant 23% share price decrease recently, causing concern among shareholders. This comes in sharp contrast to the company's five-year performance, which has yielded a 19% return, although this is significantly lower than the market's 69% return during the same period.
Investors seem to be more focused on the company's long-term prospects rather than its current earnings per share (EPS). The annual decline of 5.4% in EPS suggests this, especially considering the company's modest 2% dividend yield. This viewpoint aligns with the broader market trend where investors value future growth potential over immediate returns.
The company's five-year compound revenue growth stands at 8.1%, suggesting that Mueller Water Products might be prioritizing long-term growth over current EPS. This strategy is reflected in the CEO’s modest pay compared to similar companies, which could be an indication of prudent financial management.
InvestingPro data shows that the company's market cap stands at a solid 1920M USD, with a P/E ratio of 25.46, indicating that investors are willing to pay a higher price because they expect the company to grow in the future. The company's revenue for the last twelve months (LTM2023.Q3) is 1305.7M USD, with a growth of 7.77%.
According to InvestingPro Tips, Mueller Water Products has maintained its dividend payments for 18 consecutive years and has raised its dividend for 8 consecutive years. This aligns with the company's strategy of prioritizing long-term growth over current EPS. However, it is important to note that the company's price has fallen significantly over the last three months, which is reflected in the 23% share price decrease.
In light of these developments, future earnings predictions will play a critical role in assessing the effectiveness of this growth-oriented strategy. As such, investors and market watchers will be closely monitoring Mueller Water Products' profit forecasts in the coming months. Analysts predict the company will be profitable this year, as per InvestingPro Tips, providing a glimmer of hope for investors concerned about the recent share price decrease.
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