Head-To-Head Analysis: Kadant (KAI) and Metso Oyj (MXCYY)

Kadant (NYSE: KAI) and Metso Oyj (OTCMKTS:MXCYY) are both industrial products companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, profitability, valuation, risk and earnings.

Volatility and Risk

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Kadant has a beta of 1.37, suggesting that its share price is 37% more volatile than the S&P 500. Comparatively, Metso Oyj has a beta of 1.44, suggesting that its share price is 44% more volatile than the S&P 500.

Valuation & Earnings

This table compares Kadant and Metso Oyj’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kadant $515.03 million 2.01 $31.09 million $4.49 20.91
Metso Oyj $3.06 billion 1.49 $115.22 million $0.24 31.58

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

Analyst Recommendations

This is a summary of current recommendations and price targets for Kadant and Metso Oyj, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kadant 0 1 2 0 2.67
Metso Oyj 1 0 0 0 1.00

Kadant currently has a consensus price target of $106.00, suggesting a potential upside of 12.89%. Given Kadant’s stronger consensus rating and higher probable upside, equities analysts clearly believe Kadant is more favorable than Metso Oyj.

Profitability

This table compares Kadant and Metso Oyj’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kadant 6.04% 15.93% 7.92%
Metso Oyj 3.71% 9.95% 4.14%

Dividends

Kadant pays an annual dividend of $0.84 per share and has a dividend yield of 0.9%. Metso Oyj pays an annual dividend of $0.25 per share and has a dividend yield of 3.3%. Kadant pays out 18.7% of its earnings in the form of a dividend. Metso Oyj pays out 104.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kadant has raised its dividend for 4 consecutive years.

Insider and Institutional Ownership

90.7% of Kadant shares are held by institutional investors. Comparatively, 0.0% of Metso Oyj shares are held by institutional investors. 5.6% of Kadant shares are held by company insiders. Comparatively, 1.0% of Metso Oyj shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Kadant beats Metso Oyj on 12 of the 17 factors compared between the two stocks.

Kadant Company Profile

Kadant Inc. supplies equipment and critical components used in papermaking, paper recycling, recycling and waste management, and other process industries worldwide. The company operates in two segments, Papermaking Systems and Wood Processing Systems. The Papermaking Systems segment develops, manufactures, and markets custom-engineered stock-preparation systems and equipment for the preparation of wastepaper for conversion into recycled paper and balers, as well as related equipment used in the processing of recyclable and waste materials; and fluid-handling systems and equipment used in industrial piping systems to compensate for movement, as well as to transfer fluid, power, and data. This segment also offers doctoring systems and equipment, and related consumables to enhance the operation of paper machines and other industrial processes; and filtration and cleaning systems for draining, purifying, and recycling process water, as well as cleaning fabrics, belts, and rolls in various process industries. The Wood Processing Systems segment develops, manufactures, and markets stranders, debarkers, chippers, and logging machinery used in the harvesting and production of lumber and oriented strand board, an engineered wood panel product used primarily in home construction. This segment also provides pulping equipment refurbishment and repair services for the pulp and paper industry. The company also manufactures and sells granules for use in turf and ornamental applications, and oil and grease absorption, as well as carriers for agricultural, home lawn and garden, and professional lawn applications. The company was formerly known as Thermo Fibertek Inc. and changed its name to Kadant Inc. in July 2001. Kadant Inc. was founded in 1991 and is headquartered in Westford, Massachusetts.

Metso Oyj Company Profile

Metso Oyj is a global supplier of technology and services for mining, aggregates, oil and gas, pulp, paper, as well as process industries. The Company’s segments include Minerals, Flow Control, and Group Head Office and other. The Minerals segment covers the Company’s mining, aggregates and recycling businesses. The Flow Control segment covers the Company’s valves and pumps businesses. The Company operates in Europe, North America, South and Central America, Other Asia-Pacific, China, and Africa and Middle East regions. The Company offers its products at over 190 locations in approximately 50 countries. The Company offers a range of products in categories, including wear parts, spare parts, lokotrack mobile plants, crushers, feeders, screens, conveyors, grinding, separation, pyro processing, bulk materials handling and slurry pumps. Its services include field services, life cycle services for mining, repairs and refurbishment, chamber optimization and engineered upgrades.

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