Herman Miller (NASDAQ: MLHR) and Deluxe (NYSE:DLX) are both business services companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, profitability, risk, analyst recommendations, institutional ownership, dividends and earnings.
Earnings & Valuation
This table compares Herman Miller and Deluxe’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Herman Miller||$2.28 billion||0.84||$123.90 million||$2.16||14.79|
|Deluxe||$1.97 billion||1.80||$230.15 million||$5.27||14.04|
Deluxe has lower revenue, but higher earnings than Herman Miller. Deluxe is trading at a lower price-to-earnings ratio than Herman Miller, indicating that it is currently the more affordable of the two stocks.
This table compares Herman Miller and Deluxe’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional & Insider Ownership
82.7% of Herman Miller shares are owned by institutional investors. Comparatively, 94.3% of Deluxe shares are owned by institutional investors. 1.9% of Herman Miller shares are owned by company insiders. Comparatively, 2.4% of Deluxe shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Herman Miller pays an annual dividend of $0.72 per share and has a dividend yield of 2.3%. Deluxe pays an annual dividend of $1.20 per share and has a dividend yield of 1.6%. Herman Miller pays out 33.3% of its earnings in the form of a dividend. Deluxe pays out 22.8% 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.
This is a breakdown of recent ratings and recommmendations for Herman Miller and Deluxe, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Herman Miller presently has a consensus target price of $40.50, indicating a potential upside of 26.76%. Given Herman Miller’s higher probable upside, research analysts plainly believe Herman Miller is more favorable than Deluxe.
Risk and Volatility
Herman Miller has a beta of 1.41, indicating that its share price is 41% more volatile than the S&P 500. Comparatively, Deluxe has a beta of 1.18, indicating that its share price is 18% more volatile than the S&P 500.
Deluxe beats Herman Miller on 10 of the 15 factors compared between the two stocks.
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.
Deluxe Corporation is a provider of payment solutions. The Company provides a suite of customer life cycle management solutions to its customers across multiple channels. The Company operates in three segments: Small Business Services segment, Financial Services segment and Direct Checks segment. The Company’s product and service offerings consist of checks, forms and accessories, and other products. The forms offered by the Company include deposit tickets and check registers. Its accessories and other products include checkbook covers and stamps. The Small Business Services segment is a provider of printed forms to small businesses. The Financial Services segment provides products and services to financial institution clients and offers a suite of financial technology (FinTech) solutions. The Direct Checks segment is a direct-to-consumer check supplier. It also offers fraud protection and security services, online and offline payroll services, and electronic checks (e-checks).