Herman Miller (NASDAQ: MLHR) and Virco Manufacturing Corporation (NASDAQ:VIRC) are both business services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, institutional ownership, earnings, dividends, profitabiliy and risk.

Profitability

This table compares Herman Miller and Virco Manufacturing Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Herman Miller 5.44% 22.94% 10.29%
Virco Manufacturing Corporation 13.47% 10.87% 4.87%

Volatility & Risk

Herman Miller has a beta of 1.44, meaning that its share price is 44% more volatile than the S&P 500. Comparatively, Virco Manufacturing Corporation has a beta of 0.09, meaning that its share price is 91% less volatile than the S&P 500.

Dividends

Herman Miller pays an annual dividend of $0.68 per share and has a dividend yield of 2.0%. Virco Manufacturing Corporation does not pay a dividend. Herman Miller pays out 33.2% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Herman Miller and Virco Manufacturing Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Herman Miller $2.28 billion 0.89 $262.20 million $2.05 16.63
Virco Manufacturing Corporation $175.83 million 0.44 $10.51 million $1.54 3.34

Herman Miller has higher revenue and earnings than Virco Manufacturing Corporation. Virco Manufacturing Corporation is trading at a lower price-to-earnings ratio than Herman Miller, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

84.0% of Herman Miller shares are owned by institutional investors. Comparatively, 27.5% of Virco Manufacturing Corporation shares are owned by institutional investors. 1.9% of Herman Miller shares are owned by insiders. Comparatively, 12.2% of Virco Manufacturing Corporation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Herman Miller and Virco Manufacturing Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Herman Miller 1 2 1 0 2.00
Virco Manufacturing Corporation 0 0 1 0 3.00

Herman Miller presently has a consensus target price of $38.00, suggesting a potential upside of 11.44%. Virco Manufacturing Corporation has a consensus target price of $6.00, suggesting a potential upside of 16.50%. Given Virco Manufacturing Corporation’s stronger consensus rating and higher possible upside, analysts plainly believe Virco Manufacturing Corporation is more favorable than Herman Miller.

Summary

Herman Miller beats Virco Manufacturing Corporation on 10 of the 15 factors compared between the two stocks.

Herman Miller Company Profile

Herman Miller, Inc. is engaged in the research, design, manufacture, sale and distribution of office furniture systems, seating products, home furnishings and related services, among others. The Company’s segments include North American Furniture Solutions, which includes the design, manufacture and sale of furniture products for work-related settings, including office, education and healthcare environments, across the United States and Canada; EMEA, Latin America, and Asia Pacific (ELA) Furniture Solutions, which includes the operations associated with the design, manufacture, and sale of furniture products, primarily for work-related settings, in the Europe, Middle East and Africa (EMEA), Latin America and Asia-Pacific geographic regions, among others; Specialty segment, which includes the design, manufacture and sale of furniture products and textiles, and Consumer segment, which includes the sale of modern design furnishings and accessories to third-party retail distributors.

Virco Manufacturing Corporation Company Profile

Virco Mfg. Corporation (Virco) is engaged in the designing, producing and distributing of furniture for a range family of customers. The Company is a manufacturer and supplier of moveable educational furniture and equipment for the preschool through 12th grade market in the United States. It manufactures an assortment of products, including mobile tables, mobile storage equipment, desks, computer furniture, chairs, folding chairs and folding tables. Its primary furniture lines are constructed of tubular metal legs and frames, combined with wood and plastic tops, plastic seats and backs, upholstered seats and backs, and upholstered rigid polyethylene and polypropylene shells. Virco also has flat metal forming capabilities to enable the production of desks, returns, bookcases, filing cabinets, mobile pedestals and related items. Its ZUMA line includes cantilever chairs; tablet arm chairs with a fixed or articulating work surface and a compact footprint, and steel-frame rockers.

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