Analyzing Kaman (NYSE:KAMN) and Aerojet Rocketdyne (NYSE:AJRD)

Kaman (NYSE:KAMN) and Aerojet Rocketdyne (NYSE:AJRD) are both aerospace companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, valuation, dividends, earnings, risk, analyst recommendations and institutional ownership.

Earnings and Valuation

This table compares Kaman and Aerojet Rocketdyne’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kaman $784.46 million 1.94 -$69.74 million $2.11 25.91
Aerojet Rocketdyne $2.07 billion 1.89 $137.70 million $1.67 29.33

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Kaman and Aerojet Rocketdyne, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kaman 0 0 1 0 3.00
Aerojet Rocketdyne 0 4 2 0 2.33

Kaman currently has a consensus target price of $65.00, suggesting a potential upside of 18.87%. Aerojet Rocketdyne has a consensus target price of $54.80, suggesting a potential upside of 11.88%. Given Kaman’s stronger consensus rating and higher probable upside, research analysts clearly believe Kaman is more favorable than Aerojet Rocketdyne.

Profitability

This table compares Kaman and Aerojet Rocketdyne’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kaman -8.29% 6.30% 3.52%
Aerojet Rocketdyne 5.94% 29.26% 5.08%

Insider & Institutional Ownership

92.0% of Kaman shares are held by institutional investors. Comparatively, 93.1% of Aerojet Rocketdyne shares are held by institutional investors. 1.7% of Kaman shares are held by insiders. Comparatively, 2.2% of Aerojet Rocketdyne shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

Kaman has a beta of 1.35, indicating that its stock price is 35% more volatile than the S&P 500. Comparatively, Aerojet Rocketdyne has a beta of 0.5, indicating that its stock price is 50% less volatile than the S&P 500.

Summary

Aerojet Rocketdyne beats Kaman on 9 of the 14 factors compared between the two stocks.

About Kaman

Kaman Corporation, together with its subsidiaries, operates in the aerospace, medical, and industrial markets. The company produces and markets aircraft bearings and components; super precision miniature ball bearings; spring energized seals, springs, and contacts; and metallic and composite aero structures for commercial, military, and general aviation fixed and rotary wing aircrafts. It also provides safe and arming solutions for missile and bomb systems for the U.S. and allied militaries; manufactures and supports K-MAX manned and unmanned medium-to-heavy lift helicopters; and restores, modifies, and supports its SH-2G Super Seasprite maritime helicopters. The company operates in North America, Europe, the Middle East, Asia, Oceania, and internationally. Kaman Corporation was incorporated in 1945 and is headquartered in Bloomfield, Connecticut.

About Aerojet Rocketdyne

Aerojet Rocketdyne Holdings, Inc. designs, develops, manufactures, and sells aerospace and defense products and systems in the United States. It operates in two segments, Aerospace and Defense, and Real Estate. The Aerospace and Defense segment offers aerospace and defense products and systems for the United States government, including the Department of Defense, the National Aeronautics and Space Administration, and aerospace and defense prime contractors. This segment provides liquid and solid rocket propulsion systems, air-breathing hypersonic engines, and electric power and propulsion systems for space, defense, civil, and commercial applications; and armament systems. The Real Estate segment engages in the re-zoning, entitlement, sale, and leasing of the company's excess real estate assets. It owns 11,394 acres of land adjacent to the United States Highway 50 between Rancho Cordova and Folsom, California east of Sacramento. The company was formerly known as GenCorp Inc. and changed its name to Aerojet Rocketdyne Holdings, Inc. in April 2015. Aerojet Rocketdyne Holdings, Inc. was incorporated in 1915 and is headquartered in El Segundo, California.

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