Head to Head Review: Boeing (NYSE:BA) vs. Kratos Defense & Security Solutions (NASDAQ:KTOS)

Boeing (NYSE:BA) and Kratos Defense & Security Solutions (NASDAQ:KTOS) are both industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, dividends, analyst recommendations, valuation and risk.

Profitability

This table compares Boeing and Kratos Defense & Security Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Boeing	2.41%	-346.82%	-4.96%
Kratos Defense & Security Solutions	2.03%	3.07%	2.55%

Analyst Ratings

This is a summary of current recommendations and price targets for Boeing and Kratos Defense & Security Solutions, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Boeing	4	3	18	2	2.67
Kratos Defense & Security Solutions	2	1	20	2	2.88

Boeing currently has a consensus target price of $266.96, indicating a potential upside of 42.17%. Kratos Defense & Security Solutions has a consensus target price of $89.50, indicating a potential upside of 121.37%. Given Kratos Defense & Security Solutions’ stronger consensus rating and higher possible upside, analysts clearly believe Kratos Defense & Security Solutions is more favorable than Boeing.

Insider and Institutional Ownership

64.8% of Boeing shares are held by institutional investors. Comparatively, 75.9% of Kratos Defense & Security Solutions shares are held by institutional investors. 0.1% of Boeing shares are held by insiders. Comparatively, 1.5% of Kratos Defense & Security Solutions shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

Boeing has a beta of 1.26, indicating that its stock price is 26% more volatile than the S&P 500. Comparatively, Kratos Defense & Security Solutions has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500.

Valuation and Earnings

This table compares Boeing and Kratos Defense & Security Solutions”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Boeing	$89.46 billion	1.66	$2.23 billion	$2.31	81.29
Kratos Defense & Security Solutions	$1.35 billion	5.64	$22.00 million	$0.17	237.82

Boeing has higher revenue and earnings than Kratos Defense & Security Solutions. Boeing is trading at a lower price-to-earnings ratio than Kratos Defense & Security Solutions, indicating that it is currently the more affordable of the two stocks.

Summary

Kratos Defense & Security Solutions beats Boeing on 9 of the 14 factors compared between the two stocks.

About Boeing

The Boeing Company, together with its subsidiaries, designs, develops, manufactures, sells, services, and supports commercial jetliners, military aircraft, satellites, missile defense, human space flight and launch systems, and services worldwide. The company operates through Commercial Airplanes; Defense, Space & Security; and Global Services segments. The Commercial Airplanes segment develops, produces, and markets commercial jet aircraft for passenger and cargo requirements, as well as provides fleet support services. The Defense, Space & Security segment engages in the research, development, production, and modification of manned and unmanned military aircraft and weapons systems; strategic defense and intelligence systems, which include strategic missile and defense systems, command, control, communications, computers, intelligence, surveillance and reconnaissance, cyber and information solutions, and intelligence systems; and satellite systems, such as government and commercial satellites, and space exploration. The Global Services segment offers products and services, including supply chain and logistics management, engineering, maintenance and modifications, upgrades and conversions, spare parts, pilot and maintenance training systems and services, technical and maintenance documents, and data analytics and digital services to commercial and defense customers. The Boeing Company was incorporated in 1916 and is based in Arlington, Virginia.

About Kratos Defense & Security Solutions

Kratos Defense & Security Solutions, Inc. engages in the provision of mission critical products, services and solutions for United States national security priorities. It operates through the Kratos Government Solutions (KGS) and Unmanned Systems (US) segments. The KGS segment consists of an aggregation of KGS operating segments, including microwave electronic products, space, satellite and cyber, training solutions. The US segment refers to the unmanned aerial, unmanned ground, unmanned seaborne and related command, control and communications system businesses. The company was founded on December 19, 1994, and is headquartered in Round Rock, TX.