Kaman (NYSE: KAMN) and Edgen Group (NYSE:EDG) are both small-cap industrial products companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, valuation, earnings, risk, dividends, analyst recommendations and profitability.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kaman $1.81 billion 0.90 $58.85 million $1.81 32.33
Edgen Group N/A N/A N/A ($1.68) -0.04

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

Institutional & Insider Ownership

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

Profitability

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

Net Margins Return on Equity Return on Assets
Kaman 2.90% 9.30% 3.80%
Edgen Group N/A N/A N/A

Analyst Ratings

This is a summary of recent recommendations for Kaman and Edgen Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kaman 0 3 1 0 2.25
Edgen Group 0 0 0 0 N/A

Kaman currently has a consensus target price of $57.50, suggesting a potential downside of 1.74%. Given Kaman’s higher probable upside, equities research analysts clearly believe Kaman is more favorable than Edgen Group.

Dividends

Kaman pays an annual dividend of $0.80 per share and has a dividend yield of 1.4%. Edgen Group does not pay a dividend. Kaman pays out 44.2% of its earnings in the form of a dividend. Edgen Group has raised its dividend for 3 consecutive years.

Summary

Kaman beats Edgen Group on 11 of the 13 factors compared between the two stocks.

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.

Edgen Group Company Profile

Edgen Group Inc. (Edgen Group) is a holding company. The Company is a distributor of specialty products to the energy sector, including highly engineered steel pipe, valves, quenched and tempered and high yield heavy plate and related components. Its segments include Energy and Infrastructure Products (E&I) and Oil Country Tubular Goods (OCTG). The Company primarily serve customers that operate in the upstream (conventional and unconventional exploration, drilling and production of oil and natural gas in both onshore and offshore environments), midstream (gathering, processing, fractionation, transportation and storage of oil and natural gas) and downstream (refining and petrochemical applications) end markets for oil and natural gas. It also serves power generation, civil construction and mining applications. In December 2012, the Company, through its subsidiary acquired HSP Group Limited (HSP).

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