Contrasting Hardinge (HDNG) and Kennametal (KMT)

Hardinge (NASDAQ: HDNG) and Kennametal (NYSE:KMT) are both industrial products companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, dividends, earnings, profitability, valuation, institutional ownership and analyst recommendations.

Earnings and Valuation

This table compares Hardinge and Kennametal’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Hardinge $296.76 million 0.64 $16.45 million $0.22 66.23
Kennametal $2.06 billion 1.54 $296.82 million $0.60 65.53

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

Institutional & Insider Ownership

71.4% of Hardinge shares are owned by institutional investors. Comparatively, 97.2% of Kennametal shares are owned by institutional investors. 11.5% of Hardinge shares are owned by insiders. Comparatively, 2.0% of Kennametal shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Volatility & Risk

Hardinge has a beta of 0.91, meaning that its stock price is 9% less volatile than the S&P 500. Comparatively, Kennametal has a beta of 1.9, meaning that its stock price is 90% more volatile than the S&P 500.

Dividends

Hardinge pays an annual dividend of $0.08 per share and has a dividend yield of 0.5%. Kennametal pays an annual dividend of $0.80 per share and has a dividend yield of 2.0%. Hardinge pays out 36.4% of its earnings in the form of a dividend. Kennametal pays out 133.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hardinge has raised its dividend for 6 consecutive years.

Profitability

This table compares Hardinge and Kennametal’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hardinge 0.94% 4.61% 2.45%
Kennametal 2.39% 12.51% 5.29%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Hardinge and Kennametal, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hardinge 0 0 0 0 N/A
Kennametal 0 4 7 0 2.64

Kennametal has a consensus price target of $43.75, suggesting a potential upside of 11.27%. Given Kennametal’s higher possible upside, analysts clearly believe Kennametal is more favorable than Hardinge.

Summary

Kennametal beats Hardinge on 13 of the 16 factors compared between the two stocks.

About Hardinge

Hardinge Inc. (Hardinge) is a designer, manufacturer and distributor of machine tools, specializing in precision computer numerically controlled metalcutting machines and workholding technology solutions. The Company supplies high precision computer controlled metalcutting turning machines, grinding machines, machining centers and repair parts related to those machines. It also engineers and supplies high precision, standard and specialty workholding devices, and other machine tool accessories. It operates through two segments: Metalcutting Machine Solutions (MMS), and Aftermarket Tooling and Accessories (ATA). The MMS segment includes high precision computer controlled metalcutting turning machines, vertical machining centers, horizontal machining centers, and grinding machines. The ATA segment includes products, primarily collets and chucks that are purchased by manufacturers throughout the lives of their Hardinge or other branded machines.

About Kennametal

Kennametal Inc. is a supplier of tooling, engineered components and materials consumed in production processes. The Company operates through two segments: Industrial and Infrastructure. The Industrial segment generally serves customers that operate in industrial end markets, such as transportation, general engineering, aerospace and defense. The Infrastructure segment generally serves customers that operate in the earthworks and energy sectors supporting primary industries, such as oil and gas, power generation, underground, surface and hard-rock mining, highway construction and road maintenance. It provides wear-resistant products, application engineering and services backed by material science serving customers across various sectors. The Company’s product offerings include a selection of standard and customized technologies for metalworking, such as metal cutting tools, tooling systems and services, as well as materials, such as cemented tungsten carbide products and super alloys.

Receive News & Ratings for Hardinge Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Hardinge Inc. and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply