Continental (OTCMKTS:CTTAY) and Miller Industries (NYSE:MLR) Critical Review

Miller Industries (NYSE:MLR) and Continental (OTCMKTS:CTTAY) are both auto/tires/trucks companies, but which is the better business? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, profitability, dividends, risk and analyst recommendations.

Dividends

Miller Industries pays an annual dividend of $0.80 per share and has a dividend yield of 1.8%. Continental pays an annual dividend of $0.20 per share and has a dividend yield of 2.2%. Miller Industries pays out 17.0% of its earnings in the form of a dividend. Continental pays out 28.6% 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.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Miller Industries and Continental, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Miller Industries	0	0	1	0	3.00
Continental	0	2	1	1	2.75

Miller Industries presently has a consensus price target of $64.00, indicating a potential upside of 40.41%. Given Miller Industries’ stronger consensus rating and higher probable upside, equities analysts clearly believe Miller Industries is more favorable than Continental.

Insider & Institutional Ownership

79.2% of Miller Industries shares are owned by institutional investors. Comparatively, 0.0% of Continental shares are owned by institutional investors. 4.4% of Miller Industries shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Risk and Volatility

Miller Industries has a beta of 1.22, suggesting that its stock price is 22% more volatile than the S&P 500. Comparatively, Continental has a beta of 1.37, suggesting that its stock price is 37% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Miller Industries	4.81%	13.78%	7.76%
Continental	3.71%	9.84%	3.84%

Earnings & Valuation

This table compares Miller Industries and Continental”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Miller Industries	$1.13 billion	0.46	$63.49 million	$4.71	9.68
Continental	$42.98 billion	0.43	$1.26 billion	$0.70	13.10

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

Summary

Miller Industries beats Continental 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 Continental

Continental Aktiengesellschaft, a technology company, offers intelligent solutions for vehicles, machines, traffic, and transportation worldwide. It operates through four sectors: Automotive, Tires, ContiTech, and Contract Manufacturing. The company offers safety, brake, chassis, motion, and motion control systems; solutions for assisted and automated driving; display and operating technologies; and audio and camera solutions for the vehicle interior, as well as intelligent information and communication technology solutions. It also provides tires for cars, trucks, buses, two-wheel, and specialist vehicles, as well as digital tire monitoring and management systems; and engages in retail of tires. In addition, the company develops products and systems made from rubber, plastic, metal and textiles for the energy, agriculture, and construction, as well as interior design, automotive, transportation, and railway engineering sectors; and provides contract manufacturing services. The company was formerly known as Continental-Caoutchouc- und Gutta-Percha Compagnie. Continental Aktiengesellschaft was founded in 1871 and is headquartered in Hanover, Germany.