Residential construction remains healthy, and municipals are already coming up with cash for water and wastewater infrastructure projects ahead of stimulus-driven spending, but that's not helping the water infrastructure space outperform recently. Between supply chain pressures and derating off of what were generally too-high multiples (at least in my opinion…), this has been a weaker sub-segment of industrials since the late fall of 2021.
I thought Mueller Water (NYSE:MWA) had better prospects on its leverage to residential construction and self-help, but that didn't work out quite like I'd expected. Although Mueller shares have outperformed Xylem (XYL), they've still lagged the broader industrial space and the S&P 500. There's still a relative value call to be made here, but margin pressure is going to last a while longer and I think investors can and should consider names like Zurn (ZWS) and Franklin Electric (FELE) alongside Mueller today.
Read more here:
Mueller Water Lagging As Investors Turn Away From A Once-Hot Sector
No comments:
Post a Comment