CAE (NYSE: CAE) and Kratos Defense & Security Solutions (NASDAQ:KTOS) are both aerospace companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.
Institutional & Insider Ownership
52.1% of CAE shares are held by institutional investors. Comparatively, 74.8% of Kratos Defense & Security Solutions shares are held by institutional investors. 18.3% of CAE shares are held by insiders. Comparatively, 17.9% of Kratos Defense & Security Solutions shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
CAE has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500. Comparatively, Kratos Defense & Security Solutions has a beta of 1.86, meaning that its share price is 86% more volatile than the S&P 500.
CAE pays an annual dividend of $0.29 per share and has a dividend yield of 1.5%. Kratos Defense & Security Solutions does not pay a dividend. CAE pays out 36.7% of its earnings in the form of a dividend. CAE has increased its dividend for 2 consecutive years.
This table compares CAE and Kratos Defense & Security Solutions’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Kratos Defense & Security Solutions||-5.68%||0.73%||0.31%|
This is a summary of recent ratings and price targets for CAE and Kratos Defense & Security Solutions, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Kratos Defense & Security Solutions||0||4||5||0||2.56|
CAE presently has a consensus target price of $22.00, suggesting a potential upside of 16.96%. Kratos Defense & Security Solutions has a consensus target price of $13.44, suggesting a potential upside of 26.95%. Given Kratos Defense & Security Solutions’ stronger consensus rating and higher possible upside, analysts plainly believe Kratos Defense & Security Solutions is more favorable than CAE.
Earnings & Valuation
This table compares CAE and Kratos Defense & Security Solutions’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|CAE||$2.06 billion||2.45||$191.59 million||$0.79||23.81|
|Kratos Defense & Security Solutions||$751.90 million||1.46||-$42.70 million||$0.04||264.75|
CAE has higher revenue and earnings than Kratos Defense & Security Solutions. CAE 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.
CAE beats Kratos Defense & Security Solutions on 10 of the 17 factors compared between the two stocks.
CAE Inc. provides training for the civil aviation, defense and security, and healthcare markets. The Company designs and integrates training solutions. It operates through three segments: Civil Aviation Training Solutions, Defense and Security, and Healthcare. The Company provides training solutions for flight, cabin, maintenance and ground personnel in commercial, business and helicopter aviation, a range of flight simulation training devices, as well as ab initio pilot training and crew sourcing services. The Company is a training systems integrator for defense forces across the air, land and sea domains, and for government and civil security organizations responsible for public safety. The Company designs, manufactures and markets simulators, simulation center management solutions and courseware for training of medical and allied healthcare students and clinicians in educational institutions, hospitals and defense organizations across the world.
About Kratos Defense & Security Solutions
Kratos Defense & Security Solutions, Inc. provides mission critical products, solutions, and services in the United States. The company operates through three segments: Kratos Government Solutions, Unmanned Systems, and Public Safety & Security. The Kratos Government Solutions segment offers microwave electronic products, satellite communications, training systems, modular systems, and defense and rocket support services. The Unmanned Systems segment provides unmanned aerial systems, and unmanned ground and seaborne systems. The Public Safety & Security segment designs, engineers, deploys, operates, integrates, maintains, and operates security and surveillance solutions for homeland security, public safety, critical infrastructure, government, and commercial customers. The company serves national security related agencies, the department of defense, intelligence agencies, and classified agencies, as well as international government agencies and domestic and international commercial customers. Kratos Defense & Security Solutions, Inc. was founded in 1994 and is headquartered in San Diego, California.
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