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How Does Herman Miller Compare to Its Peers?

Gabriel Kane

US Equity Market Update for September 16, 2015

(Continued from Prior Part)

Herman Miller and its peers

An analysis of Herman Miller’s (MLHR) income statement in 1Q16 follows:

  • The gross profit margins of Herman Miller, Steelcase (SCS), HNI (HNI), Knoll (KNL), and Leggett & Platt (LEG) are 38.30%, 31.25%, 36.28%, 37.67%, and 23.13%, respectively.
  • The EPS (earnings per share) of Herman Miller, Steelcase, HNI , Knoll, and Leggett & Platt (LEG) are $0.56, $0.17, $0.52, $0.36, and $0.53, respectively.

An analysis of Herman Miller’s balance sheet in 1Q16 follows:

  • The current ratios of Herman Miller, Steelcase, HNI, Knoll, and Leggett & Platt (LEG) are 1.32, 1.58, 0.73, 1.63, and 1.48, respectively.

An analysis of Herman Miller’s valuation follows:

  • The PE (price-to-earnings) ratios of Herman Miller, Steelcase, HNI, Knoll, and Leggett & Platt are 17.20x, 27.22x, 28.70x, 18.43x, and 25.63, respectively.
  • The PBV (price-to-book value) ratios of Herman Miller, Steelcase, HNI, and Knoll are 3.89x, 3.35x, 4.72x, and 4.96x, respectively.

According to the above findings, based on the gross profit margins and EPS, Herman Miller outperformed its peers. However, the peers outperformed Herman Miller based on the current ratio and PE and PBV ratios.

ETFs that invest in Herman Miller

The Workplace Equality Portfolio (EQLT) invests 0.60% of its holdings in Herman Miller. EQLT tracks an index of about 140 global stocks selected by firm’s support of lesbian, gay, bisexual, and transgender employees in the workplace. The stocks are equally-weighted.

The First Trust Mid Cap Value AlphaDex Fund (FNK) invests 0.37% of its holdings in Herman Miller. FNK uses a proprietary quant methodology to select value stocks from the S&P MidCap 400 Index. The index employs a tiered and equal weighting scheme.

The Shares Morningstar Small-Cap Growth ETF (JKK) invests 0.36% of its holdings in Herman Miller. JKK tracks a market-cap-weighted index of US small-cap growth stocks. The index selects from the 70%–90% segment of the market cap based on five factors.

The WisdomTree SmallCap Dividend ETF (DES) invests 0.24% of its holdings in Herman Miller. DES tracks an index of dividend-paying US stocks. The dividend-weighted index is a small-cap subset of the WisdomTree Dividend Index.

Comparing Herman Miller and its ETFs

An analysis of Herman Miller’s price movement follows:

  • The YTD (year-to-date) price movements of Herman Miller, EQLT, FNK, JKK, and DES are -3.88%, -2.54%, -8.77%, 2.56%, and -7.13%, respectively.

An analysis of Herman Miller’s valuation follows:

  • The PE ratios of Herman Miller, EQLT, FNK, and JKK are 17.20x, 21.72x, 14.12x, and 53.97x, respectively.
  • The PBV ratios of Herman Miller, EQLT, FNK, and JKK are 3.89x, 2.61x, 1.35x, and 3.99x, respectively.

The ETFs outperformed Herman Miller based on the PE ratio and price movement. However, Herman Miller outperformed its ETFs based on the PBV ratio.

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