Critical Contrast: Miller Industries (NYSE:MLR) & BorgWarner (NYSE:BWA)

Miller Industries (NYSE:MLR) and BorgWarner (NYSE:BWA) are both auto/tires/trucks companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, profitability, valuation, institutional ownership, risk, earnings and analyst recommendations.

Valuation & Earnings

This table compares Miller Industries and BorgWarner”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Miller Industries	$745.48 million	0.73	$23.01 million	$1.34	35.59
BorgWarner	$14.32 billion	1.04	$277.00 million	$1.69	43.03

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

Risk & Volatility

Miller Industries has a beta of 1.11, suggesting that its share price is 11% more volatile than the S&P 500. Comparatively, BorgWarner has a beta of 1.07, suggesting that its share price is 7% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations for Miller Industries and BorgWarner, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Miller Industries	0	2	1	0	2.33
BorgWarner	0	7	7	0	2.50

Miller Industries currently has a consensus target price of $50.00, suggesting a potential upside of 4.85%. BorgWarner has a consensus target price of $71.14, suggesting a potential downside of 2.17%. Given Miller Industries’ higher probable upside, research analysts clearly believe Miller Industries is more favorable than BorgWarner.

Dividends

Miller Industries pays an annual dividend of $0.84 per share and has a dividend yield of 1.8%. BorgWarner pays an annual dividend of $0.68 per share and has a dividend yield of 0.9%. Miller Industries pays out 62.7% of its earnings in the form of a dividend. BorgWarner pays out 40.2% 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 raised its dividend for 2 consecutive years and BorgWarner has raised its dividend for 1 consecutive years. Miller Industries is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

79.2% of Miller Industries shares are held by institutional investors. Comparatively, 95.7% of BorgWarner shares are held by institutional investors. 4.5% of Miller Industries shares are held by insiders. Comparatively, 0.8% of BorgWarner shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Miller Industries	2.08%	3.70%	2.58%
BorgWarner	2.53%	18.36%	7.65%

Summary

BorgWarner beats Miller Industries on 12 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 BorgWarner

BorgWarner Inc., together with its subsidiaries, provides solutions for combustion, hybrid, and electric vehicles worldwide. It offers turbochargers, eBoosters, eTurbos, timing systems, emissions systems, thermal systems, gasoline ignition technology, smart remote actuators, powertrain sensors, cabin heaters, battery modules and systems, battery heaters, and battery charging. The company provides power electronics, control modules, software, friction, and mechanical products for automatic transmissions and torque-management products. It sells its products to original equipment manufacturers of light vehicles, which comprise passenger cars, sport-utility vehicles, vans, and light trucks; commercial vehicles, including medium-duty and heavy-duty trucks, and buses; and off-highway vehicles, such as agricultural and construction machinery, and marine applications, as well as to tier one vehicle systems suppliers and the aftermarket for light, commercial, and off-highway vehicles. The company was formerly known as Borg-Warner Automotive, Inc. BorgWarner Inc. was incorporated in 1987 and is headquartered in Auburn Hills, Michigan.