American Science & Engineering (NASDAQ: ASEI) and Cubic (NYSE:CUB) are both industrials companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, dividends, risk, profitability, institutional ownership and earnings.

Dividends

American Science & Engineering pays an annual dividend of $2.00 per share and has a dividend yield of 5.4%. Cubic pays an annual dividend of $0.27 per share and has a dividend yield of 0.4%. American Science & Engineering pays out -540.5% of its earnings in the form of a dividend. Cubic pays out -65.9% 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. American Science & Engineering is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current ratings and recommmendations for American Science & Engineering and Cubic, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Science & Engineering 0 0 0 0 N/A
Cubic 0 1 4 0 2.80

Cubic has a consensus price target of $60.60, suggesting a potential downside of 2.18%. Given Cubic’s higher possible upside, analysts plainly believe Cubic is more favorable than American Science & Engineering.

Profitability

This table compares American Science & Engineering and Cubic’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Science & Engineering 0.19% 0.15% 0.13%
Cubic -0.75% -1.66% -0.80%

Earnings & Valuation

This table compares American Science & Engineering and Cubic’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
American Science & Engineering N/A N/A N/A ($0.37) -100.14
Cubic $1.49 billion 1.13 -$11.20 million ($0.41) -151.10

American Science & Engineering has higher earnings, but lower revenue than Cubic. Cubic is trading at a lower price-to-earnings ratio than American Science & Engineering, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

72.9% of American Science & Engineering shares are held by institutional investors. Comparatively, 90.6% of Cubic shares are held by institutional investors. 2.4% of American Science & Engineering shares are held by company insiders. Comparatively, 7.7% of Cubic shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

American Science & Engineering beats Cubic on 7 of the 12 factors compared between the two stocks.

About American Science & Engineering

American Science and Engineering, Inc. (AS&E) is engaged in developing, manufacturing, marketing and selling X-ray inspection and other detection products. The Company manufactures X-ray inspection products that can be used to inspect parcels, baggage, vehicles, pallets, cargo containers and people. The Company offers its products for homeland security, force protection, public safety and other critical defense and security applications. The Company’s products and services are grouped into approximately five areas: cargo inspection systems, which include OmniView Gantry System, Z Portal System, Sentry Portal System, CarView System and ASE Connect; mobile cargo inspection systems, which include Z Backscatter Van; parcel and personnel screening inspection systems, which include Gemini System, SmartCheck System and MINI Z System; custom products, and service and support.

About Cubic

Cubic Corporation (Cubic) designs, integrates and operates systems, products and services that provide situational awareness for its customers in the transportation and defense industries. The Company operates in three business segments across the global transportation and defense markets, which include Cubic Transportation Systems (CTS), Cubic Global Defense (CGD) and Cubic Global Defense Services (CGD Services). The Company’s CTS segment is a systems integrator of payment and information technology and services for travel solutions. The Company’s CGD Systems is focused on two primary lines of business: training systems and secure communications (SC) products. The Company’s CGD Services segment is a provider of training, operations, intelligence, maintenance, technical and other support services to the United States government and its agencies and allied nations. It also provides cross-domain hardware solutions to address multi-level security challenges across common networks.

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