Head-To-Head Survey: Kadant (NYSE:KAI) versus Miller Industries (NYSE:MLR)

Miller Industries (NYSE:MLR) and Kadant (NYSE:KAI) are both industrials companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, risk, profitability, institutional ownership, valuation, earnings and analyst recommendations.

Dividends

Miller Industries pays an annual dividend of $0.84 per share and has a dividend yield of 1.6%. Kadant pays an annual dividend of $1.44 per share and has a dividend yield of 0.6%. Miller Industries pays out 67.7% of its earnings in the form of a dividend. Kadant pays out 15.5% 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. Miller Industries has increased its dividend for 2 consecutive years and Kadant has increased its dividend for 12 consecutive years.

Insider & Institutional Ownership

79.2% of Miller Industries shares are owned by institutional investors. Comparatively, 96.1% of Kadant shares are owned by institutional investors. 4.5% of Miller Industries shares are owned by insiders. Comparatively, 1.3% of Kadant shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Miller Industries and Kadant”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Miller Industries	$790.27 million	0.76	$23.01 million	$1.24	42.59
Kadant	$1.15 billion	2.67	$101.97 million	$9.30	27.99

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

Analyst Recommendations

This is a breakdown of recent ratings for Miller Industries and Kadant, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Miller Industries	0	2	1	0	2.33
Kadant	0	3	1	0	2.25

Miller Industries currently has a consensus target price of $54.00, indicating a potential upside of 2.24%. Kadant has a consensus target price of $357.50, indicating a potential upside of 37.33%. Given Kadant’s higher possible upside, analysts clearly believe Kadant is more favorable than Miller Industries.

Profitability

This table compares Miller Industries and Kadant’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Miller Industries	1.86%	3.41%	2.40%
Kadant	9.52%	13.16%	7.67%

Volatility and Risk

Miller Industries has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500. Comparatively, Kadant has a beta of 1.21, meaning that its share price is 21% more volatile than the S&P 500.

Summary

Kadant beats Miller Industries on 12 of the 16 factors compared between the two stocks.

About Miller Industries

Miller Industries, Inc., together with its subsidiaries, manufactures and sells towing and recovery equipment. The company offers wreckers that are used to recover and tow disabled vehicles and other equipment; and car carriers, which are specialized flat-bed vehicles with hydraulic tilt mechanisms, which are used to transport new or disabled vehicles and other equipment. It also provides transport trailers for moving various vehicles for auto auctions, car dealerships, leasing companies, and other similar operations. The company markets its products under the Century, Vulcan, Challenger, Holmes, Champion, Chevron, Eagle, Titan, Jige, and Boniface brands. Miller Industries, Inc. sells its products through independent distributors in North America, and Canada, Mexico; and through prime contractors to governmental entities. Miller Industries, Inc. was incorporated in 1990 and is headquartered in Ooltewah, Tennessee.

About Kadant

Kadant Inc. supplies technologies and engineered systems worldwide. It operates in three segments: Flow Control, Industrial Processing, and Material Handling. The Flow Control segment develops, manufactures, and markets fluid-handling systems and equipment, such as rotary joints, syphons, turbulator bars, expansion joints, and engineered steam and condensate systems; and doctoring, cleaning, and filtration systems and related consumables consisting of doctor systems and holders, doctor blades, cleaning shower and fabric-conditioning systems, forming systems and wear surfaces, and water-filtration systems. The Industrial Processing segment develops, manufactures, and markets ring and rotary debarkers, stranders, chippers, engineered knife systems, industrial automation and control, recycling and approach flow systems, and virgin pulping process equipment for use in the packaging, tissue, wood products, and alternative fuel industries. The Material Handling segment offers conveying and vibratory equipment, and baling products; and manufactures and sells biodegradable absorbent granules for carriers in agricultural, home lawn and garden, professional lawn, turf, and ornamental applications, as well as for oil and grease absorption. The company markets and sells its products, services, and systems through direct sales, independent sales agents, and distributors. The company was formerly known as Thermo Fibertek, Inc. and changed its name to Kadant Inc. in July 2001. Kadant Inc. was incorporated in 1991 and is headquartered in Westford, Massachusetts.