Woodward (NASDAQ: WWD) and Kaman (NYSE:KAMN) are both industrials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, earnings, valuation, profitability, risk and dividends.

Risk and Volatility

Woodward has a beta of 1.24, meaning that its share price is 24% more volatile than the S&P 500. Comparatively, Kaman has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Woodward and Kaman, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Woodward 0 4 3 0 2.43
Kaman 0 3 1 0 2.25

Woodward currently has a consensus target price of $77.71, indicating a potential downside of 1.54%. Kaman has a consensus target price of $57.50, indicating a potential downside of 1.83%. Given Woodward’s stronger consensus rating and higher probable upside, research analysts plainly believe Woodward is more favorable than Kaman.

Dividends

Woodward pays an annual dividend of $0.50 per share and has a dividend yield of 0.6%. Kaman pays an annual dividend of $0.80 per share and has a dividend yield of 1.4%. Woodward pays out 15.8% of its earnings in the form of a dividend. Kaman pays out 44.2% 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. Woodward has increased its dividend for 3 consecutive years.

Profitability

This table compares Woodward and Kaman’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Woodward 9.55% 15.55% 7.55%
Kaman 2.90% 9.30% 3.80%

Valuation & Earnings

This table compares Woodward and Kaman’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Woodward $2.10 billion 2.26 $200.50 million $3.16 24.54
Kaman $1.81 billion 0.90 $58.85 million $1.81 32.36

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

Insider and Institutional Ownership

72.1% of Woodward shares are owned by institutional investors. Comparatively, 92.6% of Kaman shares are owned by institutional investors. 6.2% of Woodward shares are owned by insiders. Comparatively, 2.4% of Kaman shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Woodward beats Kaman on 14 of the 17 factors compared between the two stocks.

Woodward Company Profile

Woodward, Inc. is an independent designer, manufacturer and service provider of energy control and optimization solutions. The Company designs, produces and services energy control products for various applications. The Company’s segments include Aerospace and Industrial. The Company’s Aerospace segment designs, manufactures and services systems and products for the management of fuel, air, combustion and motion control. The Company’s Industrial segment designs, produces and services systems and products for the management of fuel, air, fluids, gases, electricity, motion and combustion. The Company has production and assembly facilities in the United States, Europe and Asia and South America, and promotes its products and services throughout the world. The Company offers solutions for the aerospace, industrial and energy markets. The Company focuses primarily on serving original equipment manufacturers (OEMs) and equipment packagers.

Kaman 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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