Goodrich (NYSE: GR) and Kratos Defense & Security Solutions (NASDAQ:KTOS) are both aerospace & defense – nec companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, risk, valuation, institutional ownership, earnings and profitability.
This is a breakdown of recent ratings for Goodrich and Kratos Defense & Security Solutions, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Kratos Defense & Security Solutions||0||4||5||0||2.56|
Kratos Defense & Security Solutions has a consensus price target of $13.06, suggesting a potential upside of 20.88%. Given Kratos Defense & Security Solutions’ higher probable upside, analysts plainly believe Kratos Defense & Security Solutions is more favorable than Goodrich.
Risk and Volatility
Goodrich has a beta of 0.87, meaning that its stock price is 13% less volatile than the S&P 500. Comparatively, Kratos Defense & Security Solutions has a beta of 1.8, meaning that its stock price is 80% more volatile than the S&P 500.
Valuation and Earnings
This table compares Goodrich and Kratos Defense & Security Solutions’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Kratos Defense & Security Solutions||$668.70 million||1.67||-$60.50 million||($0.32)||-33.75|
Goodrich has higher earnings, but lower revenue than Kratos Defense & Security Solutions. Kratos Defense & Security Solutions is trading at a lower price-to-earnings ratio than Goodrich, indicating that it is currently the more affordable of the two stocks.
This table compares Goodrich 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||-3.39%||-1.21%||-0.45%|
Insider & Institutional Ownership
71.4% of Kratos Defense & Security Solutions shares are held by institutional investors. 17.9% of Kratos Defense & Security Solutions shares are held by company 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.
Kratos Defense & Security Solutions beats Goodrich on 6 of the 10 factors compared between the two stocks.
Goodrich Company Profile
Goodrich Corporation (Goodrich) is a supplier of aerospace components, systems and services to the commercial and general aviation airplane markets. Goodrich also is a supplier of systems and products to the defense and space markets. Its business is conducted globally with manufacturing, service and sales undertaken in various locations worldwide. Goodrich’s operates in three business segments: the Actuation and Landing Systems segment, the Nacelles and Interior Systems segment and the Electronic Systems segment. Its key products include actuation systems, landing gear, aircraft wheels and brakes, nacelles, interiors, engine control systems, intelligence surveillance and reconnaissance systems, sensor systems and power systems. On May 12, 2011, it acquired Microtecnica S.r.l. On September 30, 2011, the Company acquired Winslow Marine Products Corporation. In July 2012, United Technologies Corporation acquired Goodrich.
Kratos Defense & Security Solutions Company Profile
Kratos Defense & Security Solutions, Inc. is a technology, intellectual property and proprietary product and solution company focused on the United States and its allies’ national security. The Kratos Government Solutions segment includes the operations of Defense Rocket Support Services, Microwave Electronics Division, Technical and Training Solutions, and Modular Systems, which provide technology-based defense solutions, involving products and services, with the focus relating to the nation’s Command, Control, Communications, Computing, Combat Systems, Intelligence, Surveillance and Reconnaissance requirements. The Unmanned Systems segment includes its unmanned aerial, ground, seaborne and command, control and communications system business. The Public Safety & Security segment provides integrated solutions for homeland security, public safety, critical infrastructure, and security and surveillance systems for government and commercial applications.
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