Cramer: The Office Furniture Space Is Overlooked But There Are Lots Of Opportunities

The office furniture space is far from the most exciting sector, but investors may be overlooking investment opportunities by not paying attention to the space, according to CNBC's Jim Cramer.

Fresh off a conversation with Brian Walker, CEO of Herman Miller, Inc. MLHR, a seller of higher end furniture, Cramer believes the office furniture space is well positioned to take advantage of an ongoing shift in the office space.

Offices are in the middle of a style reformation in which "shabby" cubicles and other classic furniture pieces associated with an office are being replaced with higher-end products like standing desks and moving walls, Cramer explained during his daily "Mad Money" show on Wednesday.

"If offices want to attract talent, especially from the younger generation, they need furniture that facilitates a more collaborative work environment, which is good news for Herman Miller and Steelcase Inc. SCS," Cramer said.

How To Invest

Herman Miller delivered to investors a 5.7 percent revenue growth in 2016, Cramer continued. Granted, this did mark a deceleration from 13.8 percent growth in the prior year, but on the other hand, Steelcase's sales fell almost 1 percent last year after a flat performance in 2015.

Based on last year's performance, Herman Miller is the clear winner of the two, but this year could mark a reversal. Steelcase is expecting 2-percent growth this year while Herman Miller is looking for just 1-percent growth. On the other hand, Herman Miller is expected to deliver a 5-percent earnings growth versus Steelcase's 9-percent earnings decline.

"For me, the takeaway seems clear: either it's only raining on Steelcase's side of the street, or Herman Miller's eating their lunch," Cramer concluded. "In the office furniture showdown, Herman Miller is beating Steelcase hands down, and with the stocks trading at very similar valuations, Herman Miller looks way too cheap to me and should be bought. Steelcase? It's got a lot to prove, and so far, it's had an awful hard time proving it."

Another Furniture Maker With 20 Percent Upside: Herman Miller

Wayfair and Amazon Lead Online Furniture Growth by Growing Market Shares