Critical Comparison: Virco Manufacturing Corporation (NASDAQ:VIRC) and Herman Miller (MLHR)

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

Institutional & Insider Ownership

27.4% of Virco Manufacturing Corporation shares are held by institutional investors. Comparatively, 84.2% of Herman Miller shares are held by institutional investors. 12.2% of Virco Manufacturing Corporation shares are held by company insiders. Comparatively, 1.9% of Herman Miller shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

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.

Risk & Volatility

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

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Virco Manufacturing Corporation $175.83 million 0.49 $10.51 million $1.54 3.67
Herman Miller $2.28 billion 0.88 $262.20 million $2.05 16.46

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.

Profitability

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

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

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Virco Manufacturing Corporation and Herman Miller, as provided by MarketBeat.com.

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

Virco Manufacturing Corporation currently has a consensus target price of $6.00, indicating a potential upside of 6.19%. Herman Miller has a consensus target price of $38.00, indicating a potential upside of 12.59%. Given Herman Miller’s higher probable upside, analysts plainly believe Herman Miller is more favorable than Virco Manufacturing Corporation.

Summary

Herman Miller beats Virco Manufacturing Corporation on 11 of the 15 factors compared between the two stocks.

About Virco Manufacturing Corporation

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.

About Herman Miller

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.

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