American Outdoor Brands Corporation (NASDAQ: AOBC) and Kaman Corporation (NYSE:KAMN) are both small-cap aerospace companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, risk, valuation, earnings, dividends and profitabiliy.

Volatility & Risk

American Outdoor Brands Corporation has a beta of 0.16, suggesting that its share price is 84% less volatile than the S&P 500. Comparatively, Kaman Corporation has a beta of 0.71, suggesting that its share price is 29% less volatile than the S&P 500.

Insider and Institutional Ownership

69.0% of American Outdoor Brands Corporation shares are owned by institutional investors. Comparatively, 99.4% of Kaman Corporation shares are owned by institutional investors. 1.9% of American Outdoor Brands Corporation shares are owned by insiders. Comparatively, 2.4% of Kaman Corporation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares American Outdoor Brands Corporation and Kaman Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
American Outdoor Brands Corporation $895.12 million 1.54 $263.29 million $2.34 10.45
Kaman Corporation $1.79 billion 0.78 $164.34 million $1.96 26.05

American Outdoor Brands Corporation has higher revenue, but lower earnings than Kaman Corporation. American Outdoor Brands Corporation is trading at a lower price-to-earnings ratio than Kaman Corporation, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings for American Outdoor Brands Corporation and Kaman Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Outdoor Brands Corporation 1 5 2 0 2.13
Kaman Corporation 0 4 0 0 2.00

American Outdoor Brands Corporation presently has a consensus price target of $22.38, suggesting a potential downside of 8.49%. Kaman Corporation has a consensus price target of $55.00, suggesting a potential upside of 7.72%. Given Kaman Corporation’s higher probable upside, analysts plainly believe Kaman Corporation is more favorable than American Outdoor Brands Corporation.

Profitability

This table compares American Outdoor Brands Corporation and Kaman Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Outdoor Brands Corporation 14.88% 41.56% 21.78%
Kaman Corporation 3.09% 10.18% 4.03%

Dividends

Kaman Corporation pays an annual dividend of $0.80 per share and has a dividend yield of 1.6%. American Outdoor Brands Corporation does not pay a dividend. Kaman Corporation pays out 40.8% of its earnings in the form of a dividend. American Outdoor Brands Corporation has raised its dividend for 2 consecutive years.

Summary

American Outdoor Brands Corporation beats Kaman Corporation on 10 of the 17 factors compared between the two stocks.

American Outdoor Brands Corporation Company Profile

American Outdoor Brands Corporation, formerly Smith & Wesson Holding Corporation, is a manufacturer of firearms and a provider of accessory products for the shooting, hunting and outdoor enthusiast. The Company operates through two segments. The Firearms segment manufactures handgun and long gun products sold under the Smith & Wesson, M&P and Thompson/Center Arms brands, as well as providing forging, machining and precision plastic injection molding services. The Outdoor Products & Accessories segment provides shooting, hunting and outdoor accessories, including reloading, gunsmithing, gun cleaning supplies, tree saws, vault accessories, knives, laser sighting systems and tactical lighting products. Brands in Outdoor Products & Accessories include Crimson Trace, Caldwell Shooting Supplies, Wheeler Engineering, Lockdown Vault Accessories, BOG POD and Golden Rod Moisture Control, as well as knives and specialty tools under Schrade, Old Timer, Uncle Henry and Imperial.

Kaman Corporation Company Profile

Kaman Corporation conducts business in the aerospace and distribution markets. The Company operates through two segments: Distribution and Aerospace. The Company’s brands include KAflex, KAron and K-MAX. Distribution segment is a power transmission, motion control, and fluid power industrial distributor with operations throughout the United States. Distribution segment conducts business in the mechanical power transmission and bearings, electrical, automation and control, and fluid power product platforms and provides total solutions from system design and integration to machine parts and services to the national manufacturing industry. Aerospace segment produces and markets aircraft bearings and components; super precision, miniature ball bearings; metallic and composite aerostructures for commercial, military and general aviation fixed and rotary wing aircraft, and safe and arming solutions for missile and bomb systems for the United States and allied militaries.

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