Financial Analysis: Kaman Corporation (KAMN) versus Comfort Systems USA (FIX)
Kaman Corporation (NYSE: KAMN) and Comfort Systems USA (NYSE:FIX) are both small-cap industrial products companies, but which is the better stock? We will contrast the two companies based on the strength of their profitabiliy, institutional ownership, valuation, earnings, dividends, analyst recommendations and risk.
Earnings & Valuation
This table compares Kaman Corporation and Comfort Systems USA’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Kaman Corporation||$1.77 billion||0.80||$161.23 million||$1.85||27.55|
|Comfort Systems USA||$1.67 billion||0.74||$129.25 million||$1.67||19.88|
Kaman Corporation has higher revenue and earnings than Comfort Systems USA. Comfort Systems USA is trading at a lower price-to-earnings ratio than Kaman Corporation, indicating that it is currently the more affordable of the two stocks.
This table compares Kaman Corporation and Comfort Systems USA’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Comfort Systems USA||3.77%||16.52%||8.35%|
Insider and Institutional Ownership
99.2% of Kaman Corporation shares are held by institutional investors. Comparatively, 94.1% of Comfort Systems USA shares are held by institutional investors. 2.4% of Kaman Corporation shares are held by company insiders. Comparatively, 3.5% of Comfort Systems USA shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Volatility & Risk
Kaman Corporation has a beta of 0.69, suggesting that its share price is 31% less volatile than the S&P 500. Comparatively, Comfort Systems USA has a beta of 1.26, suggesting that its share price is 26% more volatile than the S&P 500.
Kaman Corporation pays an annual dividend of $0.80 per share and has a dividend yield of 1.6%. Comfort Systems USA pays an annual dividend of $0.30 per share and has a dividend yield of 0.9%. Kaman Corporation pays out 43.2% of its earnings in the form of a dividend. Comfort Systems USA pays out 18.0% 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. Kaman Corporation has increased its dividend for 2 consecutive years and Comfort Systems USA has increased its dividend for 4 consecutive years.
This is a summary of current ratings for Kaman Corporation and Comfort Systems USA, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Comfort Systems USA||0||2||3||0||2.60|
Kaman Corporation presently has a consensus price target of $56.67, indicating a potential upside of 11.20%. Comfort Systems USA has a consensus price target of $59.50, indicating a potential upside of 79.22%. Given Comfort Systems USA’s stronger consensus rating and higher possible upside, analysts clearly believe Comfort Systems USA is more favorable than Kaman Corporation.
Comfort Systems USA beats Kaman Corporation on 10 of the 17 factors compared between the two stocks.
About Kaman Corporation
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.
About Comfort Systems USA
Comfort Systems USA, Inc. is a provider of mechanical contracting services, which principally includes heating, ventilation and air conditioning (HVAC), plumbing, piping and controls, as well as off-site construction, electrical, monitoring and fire protection. As of December 31, 2016, the Company installed, maintained, repaired and replaced products and systems throughout its 35 operating units in 84 cities and 91 locations throughout the United States. The Company operates primarily in the commercial, industrial and institutional HVAC markets and offers services in the industrial, healthcare, education, office, technology, retail and government facilities. The Company provides a range of construction, renovation, expansion, maintenance, repair and replacement services for mechanical and related systems in commercial, industrial and institutional properties. The Company also provides remote monitoring of temperature, pressure, humidity and air flow for HVAC systems.
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