We Ran A Stock Scan For Earnings Growth And Mueller Water Products (NYSE:MWA) Passed With Ease
The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.' Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.
Despite being in the age of tech-stock blue-sky investing, many investors still adopt a more traditional strategy; buying shares in profitable companies like Mueller Water Products (NYSE:MWA). While this doesn't necessarily speak to whether it's undervalued, the profitability of the business is enough to warrant some appreciation - especially if its growing.
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If you believe that markets are even vaguely efficient, then over the long term you'd expect a company's share price to follow its earnings per share (EPS) outcomes. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. Shareholders will be happy to know that Mueller Water Products' EPS has grown 24% each year, compound, over three years. As a general rule, we'd say that if a company can keep up that sort of growth, shareholders will be beaming.
One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. Mueller Water Products shareholders can take confidence from the fact that EBIT margins are up from 13% to 18%, and revenue is growing. Ticking those two boxes is a good sign of growth, in our book.
In the chart below, you can see how the company has grown earnings and revenue, over time. For finer detail, click on the image.
Check out our latest analysis for Mueller Water Products
While we live in the present moment, there's little doubt that the future matters most in the investment decision process. So why not check this interactive chart depicting future EPS estimates, for Mueller Water Products?
It should give investors a sense of security owning shares in a company if insiders also own shares, creating a close alignment their interests. So it is good to see that Mueller Water Products insiders have a significant amount of capital invested in the stock. Holding US$58m worth of stock in the company is no laughing matter and insiders will be committed in delivering the best outcomes for shareholders. This should keep them focused on creating long term value for shareholders.
It means a lot to see insiders invested in the business, but shareholders may be wondering if remuneration policies are in their best interest. Our quick analysis into CEO remuneration would seem to indicate they are. Our analysis has discovered that the median total compensation for the CEOs of companies like Mueller Water Products with market caps between US$2.0b and US$6.4b is about US$7.5m.
Mueller Water Products' CEO took home a total compensation package worth US$6.2m in the year leading up to September 2024. That is actually below the median for CEO's of similarly sized companies. CEO remuneration levels are not the most important metric for investors, but when the pay is modest, that does support enhanced alignment between the CEO and the ordinary shareholders. Generally, arguments can be made that reasonable pay levels attest to good decision-making.
If you believe that share price follows earnings per share you should definitely be delving further into Mueller Water Products' strong EPS growth. If you still have your doubts, remember too that company insiders have a considerable investment aligning themselves with the shareholders and CEO pay is quite modest compared to similarly sized companiess. The overarching message here is that Mueller Water Products has underlying strengths that make it worth a look at. However, before you get too excited we've discovered 1 warning sign for Mueller Water Products that you should be aware of.
While opting for stocks without growing earnings and absent insider buying can yield results, for investors valuing these key metrics, here is a carefully selected list of companies in the US with promising growth potential and insider confidence.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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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Forward-looking statements often use words such as "believe," "expect," "anticipate," "intend," "estimate," "project," "outlook," "forecast," "target," "trend," "plan," "goal," or other words of comparable meaning or future-tense or conditional verbs such as "may," "will," "should," "would," or "could." These forward-looking statements are based on the current expectations and estimates by the Company's management and are subject to various risks and uncertainties that may cause results to differ from management's current expectations. Such factors include risks detailed from time-to-time in the Company's SEC reports and filings. All forward-looking statements, if any, in this release represent the Company's judgment as of the date of this release. The company disclaims any intent or obligation to update these forward-looking statements. 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Why Shares of Oklo Stock Soared 122% Last Month
Oklo is soaring because of narratives around nuclear energy and an executive order. The company aims to get its new reactors to market by 2028, but that may prove to be aggressive timing. The company generates zero revenue but has a market cap of $6.8 billion. 10 stocks we like better than Oklo › Shares of Oklo (NYSE: OKLO) sank this week, according to data from S&P Global Market Intelligence. The company aiming to build what it calls fast-fission nuclear reactors is benefiting from nuclear energy executive orders and a global renaissance for the energy category. Up almost 400% since going public through a special purpose acquisition company (SPAC), the company now has a market cap of $6.8 billion and zero revenue. Here's why shares of Oklo soared in the month of May. Rising demand for electricity has companies in the artificial intelligence (AI) sector looking for truly reliable and renewable energy. Nuclear energy is the only type of energy that checks off both criteria. Large technology companies investing in data centers, like Amazon and Microsoft, are signing commitments to try and get more nuclear power used in their operations. The White House just released an executive order around Nuclear Power, saying the industry in the United States needs to be reinvigorated. All of this talk around nuclear power has stocks such as Oklo soaring. The company's founder was at the executive order signing by President Trump, and the company even put out a press release about the matter. It is aiming to build small fission reactors with recyclable material and aims to have plant operations begin at its first site in Idaho by late 2027 or early 2028. Until then, the company is not generating any revenue. Its stock is all riding on the future and hopes from shareholders that the company can spin itself into one of the nuclear energy leaders of the next few decades. Oklo wants to become a nuclear power giant through its innovative designs. The problem remains around approvals and cash burn. It has a free cash flow burn of $44 million and $200 million in cash on the balance sheet. It says that it aims to get its plant underway by 2028 at the latest, but it has not gotten any approvals from the Nuclear Regulatory Commission (NRC). Competitor NuScale Power Corporation has approval and still doesn't think it can get its reactors up and running until 2030. The timelines don't match up. Investing in pre-revenue stocks is mighty dangerous. Oklo has no sales, is burning a lot of cash, and has never proven its designs work. There are no approvals by the NRC. The stock has a market cap of $6.8 billion, built on castles in the air. If you buy this stock, you are taking a huge risk with your portfolio. Before you buy stock in Oklo, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Oklo wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $656,825!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $865,550!* Now, it's worth noting Stock Advisor's total average return is 994% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Brett Schafer has positions in Amazon. The Motley Fool has positions in and recommends Amazon and Microsoft. The Motley Fool recommends NuScale Power and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Why Shares of Oklo Stock Soared 122% Last Month was originally published by The Motley Fool
