Analyzing Applied Industrial Technologies (AIT) and Kaman Aircraft (KAMN)

Applied Industrial Technologies (NYSE: AIT) and Kaman Aircraft (NYSE:KAMN) are both industrial products companies, but which is the better stock? We will compare the two companies based on the strength of their earnings, risk, valuation, profitability, institutional ownership, dividends and analyst recommendations.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Applied Industrial Technologies and Kaman Aircraft, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Applied Industrial Technologies 0 3 0 0 2.00
Kaman Aircraft 0 1 0 0 2.00

Applied Industrial Technologies currently has a consensus target price of $63.00, suggesting a potential downside of 8.76%. Kaman Aircraft has a consensus target price of $65.00, suggesting a potential downside of 6.77%. Given Kaman Aircraft’s higher probable upside, analysts clearly believe Kaman Aircraft is more favorable than Applied Industrial Technologies.

Profitability

This table compares Applied Industrial Technologies and Kaman Aircraft’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Applied Industrial Technologies 5.40% 17.52% 8.43%
Kaman Aircraft 3.14% 11.59% 4.95%

Valuation & Earnings

This table compares Applied Industrial Technologies and Kaman Aircraft’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Applied Industrial Technologies $2.59 billion 1.03 $133.91 million $2.84 24.31
Kaman Aircraft $1.81 billion 1.07 $49.82 million $2.23 31.26

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

Risk & Volatility

Applied Industrial Technologies has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500. Comparatively, Kaman Aircraft has a beta of 0.81, meaning that its stock price is 19% less volatile than the S&P 500.

Dividends

Applied Industrial Technologies pays an annual dividend of $1.20 per share and has a dividend yield of 1.7%. Kaman Aircraft pays an annual dividend of $0.80 per share and has a dividend yield of 1.1%. Applied Industrial Technologies pays out 42.3% of its earnings in the form of a dividend. Kaman Aircraft pays out 35.9% 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. Applied Industrial Technologies has raised its dividend for 8 consecutive years and Kaman Aircraft has raised its dividend for 3 consecutive years. Applied Industrial Technologies is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

92.4% of Applied Industrial Technologies shares are owned by institutional investors. Comparatively, 93.9% of Kaman Aircraft shares are owned by institutional investors. 3.7% of Applied Industrial Technologies shares are owned by company insiders. Comparatively, 2.4% of Kaman Aircraft shares are owned 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

Applied Industrial Technologies beats Kaman Aircraft on 10 of the 15 factors compared between the two stocks.

Applied Industrial Technologies Company Profile

Applied Industrial Technologies, Inc. distributes industrial products in the United States, Puerto Rico, Canada, Mexico, Australia, New Zealand, and Singapore. The company offers its products for maintenance, repair, and operational, as well as original equipment manufacturing customers. It operates in two segments, Service Center-Based Distribution and Fluid Power Businesses. The company distributes bearings, power transmission components, fluid power components and systems, industrial rubber products, linear motion components, tools, safety products, oilfield supplies, and other industrial and maintenance supplies; and fluid power products, such as hydraulic, pneumatic, lubrication, and filtration components and systems. It also operates fabricated rubber shops that modify and repair conveyor belts, as well as provide hose assemblies; and field crews to install and repair conveyor belts and rubber lining at customer locations. In addition, the company rebuilds or assembles speed reducers, pumps, valves, cylinders, and electric and hydraulic motors, as well as custom machining products; and offers equipment repair services and technical advice to customers. It offers industrial products through a network of service centers; and fluid power products directly to customers or through service centers. The company serves various industries, including agriculture and food processing, automotive, chemicals and petrochemicals, fabricated metals, forest products, industrial machinery and equipment, mining, oil and gas, primary metals, transportation, and utilities, as well as government entities. Applied Industrial Technologies, Inc. was founded in 1923 and is headquartered in Cleveland, Ohio.

Kaman Aircraft Company Profile

Kaman Corporation operates in the aerospace and distribution markets. It operates through two segments, Distribution and Aerospace. The Distribution segment distributes electro-mechanical products; bearings; and power transmission, motion control, and electrical and fluid power components, as well as offers value-added services. This segment serves maintenance, repair, and overhaul markets; and original equipment manufacturer customers. The Aerospace segment produces and markets aircraft bearings and components; super precision miniature ball bearings for the medical, industrial, and aerospace markets; and metallic and composite aerostructures for commercial, military, and general aviation fixed and rotary wing aircraft. This segment also provides safe and arming solutions for missile and bomb systems for the U.S. and allied militaries; undertakes helicopter subcontract works; restores, modifies, and supports its SH-2G Super Seasprite maritime helicopters; and manufactures and supports K-MAX manned and unmanned medium-to-heavy lift helicopters, as well as offers engineering design, analysis, and certification services. The company operates in North America, Europe, the Middle East, Asia, Oceania, and other countries. Kaman Corporation was founded in 1945 and is headquartered in Bloomfield, Connecticut.

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