Head to Head Contrast: Dover (DOV) versus Kaman (NYSE:KAMN)

Kaman (NYSE: KAMN) and Dover (NYSE:DOV) are both industrials companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, profitability, valuation and risk.

Profitability

This table compares Kaman and Dover’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%
Dover 8.91% 14.10% 5.52%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Kaman and Dover, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kaman 0 4 1 0 2.20
Dover 0 10 7 0 2.41

Kaman currently has a consensus price target of $56.67, suggesting a potential downside of 3.79%. Dover has a consensus price target of $94.09, suggesting a potential downside of 1.94%. Given Dover’s stronger consensus rating and higher possible upside, analysts clearly believe Dover is more favorable than Kaman.

Insider & Institutional Ownership

92.6% of Kaman shares are held by institutional investors. Comparatively, 84.6% of Dover shares are held by institutional investors. 2.4% of Kaman shares are held by insiders. Comparatively, 2.5% of Dover shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Volatility and Risk

Kaman has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500. Comparatively, Dover has a beta of 1.29, indicating that its stock price is 29% more volatile than the S&P 500.

Dividends

Kaman pays an annual dividend of $0.80 per share and has a dividend yield of 1.4%. Dover pays an annual dividend of $1.88 per share and has a dividend yield of 2.0%. Kaman pays out 44.2% of its earnings in the form of a dividend. Dover pays out 43.7% 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. Kaman has raised its dividend for 2 consecutive years and Dover has raised its dividend for 61 consecutive years. Dover is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Kaman and Dover’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kaman $1.81 billion 0.91 $58.85 million $1.81 32.54
Dover $6.79 billion 2.20 $508.89 million $4.30 22.31

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

Summary

Dover beats Kaman on 15 of the 17 factors compared between the two stocks.

About Kaman

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.

About Dover

Dover Corporation is a diversified global manufacturer delivering equipment and components, specialty systems, consumable supplies, software and digital solutions and support services. The Company’s segments include Energy, Engineered Systems, Fluids and Refrigeration & Food Equipment. The Company’s Energy segment is a provider of solutions and services for production and processing of fuels around the world. Its Engineered Systems segment includes two platforms: Printing & Identification, and Industrials and is focused on the design, manufacture and service of critical equipment and components serving the fast-moving consumer goods, digital textile printing and industrial end markets. Its Fluids segment is focused on the safe handling of critical fluids across the retail fueling, chemical, and industrial end markets. The Refrigeration & Food Equipment segment is a provider of energy efficient equipment and systems serving the commercial refrigeration and food equipment end markets.

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