Miller Industries (NYSE:MLR – Get Free Report) and Freightcar America (NASDAQ:RAIL – Get Free Report) are both small-cap industrials companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, profitability, earnings, analyst recommendations, institutional ownership and dividends.
Analyst Ratings
This is a breakdown of current recommendations for Miller Industries and Freightcar America, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Miller Industries | 0 | 2 | 1 | 0 | 2.33 |
| Freightcar America | 1 | 1 | 0 | 0 | 1.50 |
Miller Industries presently has a consensus target price of $54.00, indicating a potential upside of 5.24%. Given Miller Industries’ stronger consensus rating and higher probable upside, analysts plainly believe Miller Industries is more favorable than Freightcar America.
Volatility and Risk
Miller Industries has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500. Comparatively, Freightcar America has a beta of 1.42, suggesting that its share price is 42% more volatile than the S&P 500.
Valuation & Earnings
This table compares Miller Industries and Freightcar America”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 | 0.74 | $23.01 million | $1.24 | 41.38 |
| Freightcar America | $463.52 million | 0.42 | $38.10 million | ($0.54) | -10.96 |
Freightcar America has lower revenue, but higher earnings than Miller Industries. Freightcar America is trading at a lower price-to-earnings ratio than Miller Industries, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
79.2% of Miller Industries shares are owned by institutional investors. Comparatively, 32.0% of Freightcar America shares are owned by institutional investors. 4.5% of Miller Industries shares are owned by company insiders. Comparatively, 29.2% of Freightcar America shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Profitability
This table compares Miller Industries and Freightcar America’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% |
| Freightcar America | -2.69% | -15.23% | 2.90% |
Dividends
Miller Industries pays an annual dividend of $0.84 per share and has a dividend yield of 1.6%. Freightcar America pays an annual dividend of $0.36 per share and has a dividend yield of 6.1%. Miller Industries pays out 67.7% of its earnings in the form of a dividend. Freightcar America pays out -66.7% 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. Freightcar America is clearly the better dividend stock, given its higher yield and lower payout ratio.
Summary
Miller Industries beats Freightcar America on 11 of the 17 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 Freightcar America
FreightCar America, Inc., through its subsidiaries, engages in design, manufacture, and sale of railcars and railcar components for the transportation of bulk commodities and containerized freight products in the United States and Mexico. It operates in two segments, Manufacturing and Parts. The company offers a range of railcars, including open top hoppers, mill gondola cars, intermodal and non-intermodal flat cars, coal cars; bulk commodity cars covered hopper cars, coil steel cars, boxcars, woodchip hoppers, aluminum vehicle carriers, and articulated bulk container railcars. It also sells used railcars; rebuilds, converts, and leases railcars; and sells forged, cast, and fabricated parts for various railcars. The company's customers primarily include shippers, railroads, and financial institutions. FreightCar America, Inc. was founded in 1901 and is headquartered in Chicago, Illinois.
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