Head to Head Survey: Herman Miller (MLHR) vs. Deluxe (DLX)

Herman Miller (NASDAQ: MLHR) and Deluxe (NYSE:DLX) are both business services companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, profitability, dividends, earnings and analyst recommendations.

Dividends

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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 1.7%. Herman Miller pays out 33.6% of its earnings in the form of a dividend. Deluxe pays out 25.4% 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.

Insider and Institutional Ownership

82.6% of Herman Miller shares are held by institutional investors. Comparatively, 94.3% of Deluxe shares are held by institutional investors. 1.9% of Herman Miller shares are held by insiders. Comparatively, 2.4% of Deluxe shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

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
Herman Miller 5.55% 22.26% 10.20%
Deluxe 11.71% 26.80% 11.76%

Earnings & Valuation

This table compares Herman Miller and Deluxe’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Herman Miller $2.28 billion 0.80 $123.90 million $2.14 14.35
Deluxe $1.97 billion 1.72 $230.15 million $4.72 14.95

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

Analyst Ratings

This is a summary of recent recommendations and price targets for Herman Miller and Deluxe, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Herman Miller 0 0 2 0 3.00
Deluxe 0 0 0 0 N/A

Herman Miller currently has a consensus price target of $40.50, suggesting a potential upside of 31.92%. Given Herman Miller’s higher possible upside, equities analysts plainly believe Herman Miller is more favorable than Deluxe.

Risk & Volatility

Herman Miller has a beta of 1.41, indicating that its stock price is 41% more volatile than the S&P 500. Comparatively, Deluxe has a beta of 1.18, indicating that its stock price is 18% more volatile than the S&P 500.

Summary

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.

About Deluxe

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).

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