Validea’s pick of the week provides a detailed report on a company that scores well in the stock-screening service’s model portfolios. On Validea.ca, investors can analyze 1,000 Canadian stocks through 12 different guru-based models and get individual reports on each company. Globe Investor provides marketing and data services to Validea.ca and receives compensation. Try it.
West Michigan-based Herman Miller Inc. makes innovative interior furnishings for use in offices, health-care facilities, educational settings, and residences. Miller’s designs are part of museum collections worldwide, and the company is a past recipient of the Smithsonian Institution's Cooper Hewitt National Design Award. It employs over 7,000 people worldwide and has a market cap of $1.4-billion (U.S.).
The company has grown EPS at a 16.5-per-cent clip over the long term (using avg of 3, 4, 5 yr EPS growth rates), which the Peter Lynch model likes. It trades for just 12.6 times trailing 12-month EPS and has a 2.5% per cent dividend yield. The Lynch model likes its 0.66 yield-adjusted P/E-to-growth ratio (PE/(EPS growth + dividend yield)
Herman Miller has a return on capital (EBIT/tangible capital employed) of 51 per cent, which impresses the Joel Greenblatt-based model. It has a 12.4-per-cent earnings yield (EBIT/enterprise value), part of why the Greenblatt-based model has strong interest.
The company trades for just 0.6 times sales, has a reasonable debt/equity ratio of 54 per cent and has a return on equity of 25.4% per cent.
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