Head to Head Review: Paul Mueller (OTCMKTS:MUEL) versus Illinois Tool Works (NYSE:ITW)

Paul Mueller (OTCMKTS:MUEL) and Illinois Tool Works (NYSE:ITW) are both industrials companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, valuation, profitability, institutional ownership and earnings.

Insider & Institutional Ownership

79.8% of Illinois Tool Works shares are held by institutional investors. 4.0% of Paul Mueller shares are held by company insiders. Comparatively, 0.9% of Illinois Tool Works shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Paul Mueller and Illinois Tool Works’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Paul Mueller	13.25%	42.53%	20.96%
Illinois Tool Works	21.31%	90.89%	19.17%

Volatility and Risk

Paul Mueller has a beta of 0.18, indicating that its stock price is 82% less volatile than the S&P 500. Comparatively, Illinois Tool Works has a beta of 1.1, indicating that its stock price is 10% more volatile than the S&P 500.

Dividends

Paul Mueller pays an annual dividend of $1.20 per share and has a dividend yield of 0.3%. Illinois Tool Works pays an annual dividend of $6.00 per share and has a dividend yield of 2.3%. Paul Mueller pays out 2.8% of its earnings in the form of a dividend. Illinois Tool Works pays out 52.6% 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. Illinois Tool Works has increased its dividend for 55 consecutive years. Illinois Tool Works is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Paul Mueller and Illinois Tool Works”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Paul Mueller	$248.59 million	1.44	$29.67 million	$42.72	8.99
Illinois Tool Works	$15.90 billion	4.81	$3.49 billion	$11.41	22.98

Illinois Tool Works has higher revenue and earnings than Paul Mueller. Paul Mueller is trading at a lower price-to-earnings ratio than Illinois Tool Works, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings for Paul Mueller and Illinois Tool Works, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Paul Mueller	0	0	0	0	0.00
Illinois Tool Works	3	8	1	0	1.83

Illinois Tool Works has a consensus target price of $260.67, indicating a potential downside of 0.58%. Given Illinois Tool Works’ stronger consensus rating and higher probable upside, analysts plainly believe Illinois Tool Works is more favorable than Paul Mueller.

Summary

Illinois Tool Works beats Paul Mueller on 13 of the 17 factors compared between the two stocks.

About Paul Mueller

Paul Mueller Company, together with its subsidiaries, provides manufactured equipment and components in the United States, North America, Asia, the Far East, the Netherlands, EU countries, Europe, and internationally. The company operates through four reportable segments: Dairy Farm Equipment, Industrial Equipment, Field Fabrication, and Transportation. The Dairy Farm Equipment segment offers milk cooling and storage equipment and accessories, refrigeration units, and heat recovery equipment for use on dairy farms to independent dealers for resale, and directly to farmers; and services for farmers, as well as milk coolers for rent to farmers. The Industrial Equipment segment sells food, beverage, chemical, and industrial processing equipment; and biopharmaceutical and pure water equipment, as well as stainless steel, alloy processing, storage tanks, and heat transfer products. The Field Fabrication segment sells large, field-fabricated tanks and vessels, such as stainless steel storage tanks for sanitary and industrial process applications. The Transportation segment offers delivery of products to customers; backhauls of materials and components; and contract carriage for third parties. It serves its products in various industries, including animal health, beverage, brewing, chemical, dairy farm, dairy processing, food, heat transfer, HVAC, industrial construction, oil and gas, personal care, pharmaceutical, pure water, tank fabrication, and wine. The company was founded in 1940 and is headquartered in Springfield, Missouri.

About Illinois Tool Works

Illinois Tool Works Inc. manufactures and sells industrial products and equipment in the United States and internationally. It operates through seven segments: Automotive OEM; Food Equipment; Test & Measurement and Electronics; Welding; Polymers & Fluids; Construction Products; and Specialty Products. The Automotive OEM segment offers plastic and metal components, fasteners, and assemblies for automobiles, light trucks, and other industrial uses. The Food Equipment segment provides warewashing, refrigeration, cooking, and food processing equipment; kitchen exhaust, ventilation, and pollution control systems; and food equipment maintenance and repair services. The Test & Measurement and Electronics segment produces and sells equipment, consumables, and related software for testing and measuring of materials and structures, as well as equipment and consumables used in the production of electronic subassemblies and microelectronics. The Welding segment produces arc welding equipment; and metal arc welding consumables and related accessories. The Polymers & Fluids segment produces adhesives, sealants, lubrication and cutting fluids, and fluids and polymers for auto aftermarket maintenance and appearance. The Construction Products segment offers engineered fastening systems and solutions for the residential construction, renovation/remodel, and commercial construction markets. The Specialty Products segment provides beverage packaging equipment and consumables, product coding and marking equipment and consumables, and appliance components and fasteners. It serves the automotive OEM and tiers, MRO, commercial food equipment, construction, general industrial, industrial capital goods, consumer durables, automotive aftermarket end, and other markets. The company distributes its products directly to industrial manufacturers, as well as through independent distributors. Illinois Tool Works Inc. was founded in 1912 and is based in Glenview, Illinois.