MillerKnoll (NASDAQ:MLKN) and Flexsteel Industries (NASDAQ:FLXS) Critical Analysis

MillerKnoll (NASDAQ:MLKN) and Flexsteel Industries (NASDAQ:FLXS) are both small-cap consumer discretionary companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, dividends, profitability, analyst recommendations, valuation, risk and institutional ownership.

Insider & Institutional Ownership

87.5% of MillerKnoll shares are owned by institutional investors. Comparatively, 36.3% of Flexsteel Industries shares are owned by institutional investors. 5.5% of MillerKnoll shares are owned by insiders. Comparatively, 11.2% of Flexsteel Industries shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for MillerKnoll and Flexsteel Industries, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MillerKnoll	1	2	0	1	2.25
Flexsteel Industries	1	1	0	0	1.50

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MillerKnoll	$3.76 billion	0.26	-$36.90 million	($0.25)	-57.12
Flexsteel Industries	$447.51 million	0.41	$20.15 million	$4.11	8.42

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

Dividends

MillerKnoll pays an annual dividend of $0.75 per share and has a dividend yield of 5.3%. Flexsteel Industries pays an annual dividend of $0.80 per share and has a dividend yield of 2.3%. MillerKnoll pays out -300.0% of its earnings in the form of a dividend. Flexsteel Industries pays out 19.5% 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. Flexsteel Industries has increased its dividend for 1 consecutive years. MillerKnoll is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares MillerKnoll and Flexsteel Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MillerKnoll	-0.41%	10.96%	3.56%
Flexsteel Industries	5.22%	16.28%	9.75%

Risk and Volatility

MillerKnoll has a beta of 1.36, suggesting that its share price is 36% more volatile than the S&P 500. Comparatively, Flexsteel Industries has a beta of 0.55, suggesting that its share price is 45% less volatile than the S&P 500.

Summary

Flexsteel Industries beats MillerKnoll on 9 of the 16 factors compared between the two stocks.

About MillerKnoll

MillerKnoll, Inc. researches, designs, manufactures, and distributes interior furnishings worldwide. It operates through three segments: Americas Contract, International Contract & Specialty, and Global Retail. The company also provides seating products, furniture systems, other freestanding furniture elements, textiles, leather, felt, home furnishings and related services, casegoods, storage products, as well as residential, education, and healthcare furniture solutions. It offers its products under the MillerKnoll, Herman Miller, Herman Miller Circled Symbolic M, Knoll, Maharam, Geiger, Design Within Reach, DWR, HAY, NaughtOne, Nemschoff, Aeron, Mirra, Embody, Setu, Sayl, Cosm, Caper, Eames, Knoll, KnollExtra, Knoll Luxe, KnollStudio, KnollTextiles, Edelman Leather, Spinneybeck Leather, Generation by Knoll, Regeneration by Knoll, MultiGeneration by Knoll, Remix, Holly Hunt, Vladimir Kagan, Muuto, Barcelona, and Womb names. The company offers its products through independent contract furniture dealers, direct contract sales, e-commerce websites, and wholesale and retail stores. Its products are used in institutional, health/science, and residential and other environments, and industrial and educational settings, as well as transportation terminals. The company was formerly known as Herman Miller, Inc. and changed its name to MillerKnoll, Inc. in November 2021. MillerKnoll, Inc. was incorporated in 1905 and is headquartered in Zeeland, Michigan.

About Flexsteel Industries

Flexsteel Industries, Inc., together with its subsidiaries, operates as a manufacturer, importer, and markets of upholstered furniture for residential and contract markets in the United States. It provides upholstered furniture, such as sofas, loveseats, chairs, reclining rocking chairs, swivel rockers, sofa beds, convertible bedding units, occasional tables, desks, dining tables and chairs, kitchen storage, bedroom furniture, and outdoor furniture. The company distributes its products through e-commerce channels and dealer sales force. It also engages in export related activities. Flexsteel Industries, Inc. was founded in 1893 and is based in Dubuque, Iowa.