Critical Analysis: Freightcar America (NASDAQ:RAIL) & Miller Industries (NYSE:MLR)

Freightcar America (NASDAQ:RAIL) and Miller Industries (NYSE:MLR) are both small-cap industrials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, valuation and dividends.

Profitability

This table compares Freightcar America and Miller Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Freightcar America	-2.69%	-15.23%	2.90%
Miller Industries	1.86%	3.41%	2.40%

Volatility and Risk

Freightcar America has a beta of 1.42, indicating that its stock price is 42% more volatile than the S&P 500. Comparatively, Miller Industries has a beta of 1.12, indicating that its stock price is 12% more volatile than the S&P 500.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Freightcar America	$500.99 million	0.41	$38.10 million	($0.54)	-11.65
Miller Industries	$790.27 million	0.77	$23.01 million	$1.24	43.02

Freightcar America has higher earnings, but lower revenue 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

32.0% of Freightcar America shares are owned by institutional investors. Comparatively, 79.2% of Miller Industries shares are owned by institutional investors. 29.2% of Freightcar America shares are owned by company insiders. Comparatively, 4.5% of Miller Industries shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and target prices for Freightcar America and Miller Industries, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Freightcar America	1	1	0	0	1.50
Miller Industries	0	2	1	0	2.33

Miller Industries has a consensus target price of $54.00, suggesting a potential upside of 1.22%. Given Miller Industries’ stronger consensus rating and higher probable upside, analysts plainly believe Miller Industries is more favorable than Freightcar America.

Summary

Miller Industries beats Freightcar America on 10 of the 14 factors compared between the two stocks.

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.

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.