ITT (NYSE:ITT – Get Free Report) and Kadant (NYSE:KAI – Get Free Report) are both industrials companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, valuation, risk and analyst recommendations.
Valuation and Earnings
This table compares ITT and Kadant”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| ITT | $3.94 billion | 4.96 | $488.00 million | $5.10 | 42.82 |
| Kadant | $1.05 billion | 3.47 | $101.97 million | $9.30 | 33.27 |
Dividends
ITT pays an annual dividend of $1.54 per share and has a dividend yield of 0.7%. Kadant pays an annual dividend of $1.44 per share and has a dividend yield of 0.5%. ITT pays out 30.2% of its earnings in the form of a dividend. Kadant pays out 15.5% 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. ITT has increased its dividend for 10 consecutive years and Kadant has increased its dividend for 12 consecutive years.
Volatility & Risk
ITT has a beta of 1.27, suggesting that its stock price is 27% more volatile than the S&P 500. Comparatively, Kadant has a beta of 1.2, suggesting that its stock price is 20% more volatile than the S&P 500.
Insider & Institutional Ownership
91.6% of ITT shares are held by institutional investors. Comparatively, 96.1% of Kadant shares are held by institutional investors. 0.9% of ITT shares are held by company insiders. Comparatively, 1.3% of Kadant shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Profitability
This table compares ITT and Kadant’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| ITT | 8.90% | 15.90% | 7.74% |
| Kadant | 9.52% | 13.16% | 7.67% |
Analyst Ratings
This is a summary of recent ratings and price targets for ITT and Kadant, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| ITT | 0 | 1 | 11 | 0 | 2.92 |
| Kadant | 0 | 3 | 1 | 0 | 2.25 |
ITT currently has a consensus target price of $241.08, indicating a potential upside of 10.39%. Kadant has a consensus target price of $357.50, indicating a potential upside of 15.56%. Given Kadant’s higher probable upside, analysts clearly believe Kadant is more favorable than ITT.
Summary
ITT beats Kadant on 10 of the 17 factors compared between the two stocks.
About ITT
ITT Inc., together with its subsidiaries, manufactures and sells engineered critical components and customized technology solutions for the transportation, industrial, and energy markets in the United States and internationally. The Motion Technologies segment manufactures brake pads, shims, shock absorbers, and energy absorption components; and sealing technologies primarily for the transportation industry, including passenger cars, trucks, light- and heavy-duty commercial and military vehicles, buses, and trains. This segment sells its products under ITT Friction Technologies, KONI, Wolverine Advanced Materials, Axtone, Novitek, and GALT. brand names. The Industrial Process segment provides industrial pumps, valves, and plant optimization and remote monitoring systems and services; and aftermarket solutions, such as replacement parts and services. It serves various customers in industries, such as chemical, energy, mining, and other industrial process markets. This segment sells its products under Goulds Pumps, Bornemann, Engineered Valves, PRO Services, C'treat, i-ALERT, Rheinhütte Pumpen, and Habonim brand names. The Connect & Control Technologies segment designs and manufactures a range of engineered connectors and specialized products for critical applications supporting various markets, including aerospace and defense, industrial, transportation, medical, and energy. This segment provides connector products, such as circular, rectangular, radio frequency, fiber optic, D-sub miniature, micro-miniature, and cable assemblies; and control products consist of highly engineered actuation, flow control, energy absorption, environmental control, and composite component solutions for the aerospace, defense, and industrial markets under Cannon, VEAM, BIW Connector Systems, Aerospace Controls, Enidine, Compact Automation, Neo-Dyn Process Controls, Conoflow, and Micro-Mode brand names. The company was incorporated in 1920 and is headquartered in Stamford, Connecticut.
About Kadant
Kadant Inc. supplies technologies and engineered systems worldwide. It operates in three segments: Flow Control, Industrial Processing, and Material Handling. The Flow Control segment develops, manufactures, and markets fluid-handling systems and equipment, such as rotary joints, syphons, turbulator bars, expansion joints, and engineered steam and condensate systems; and doctoring, cleaning, and filtration systems and related consumables consisting of doctor systems and holders, doctor blades, cleaning shower and fabric-conditioning systems, forming systems and wear surfaces, and water-filtration systems. The Industrial Processing segment develops, manufactures, and markets ring and rotary debarkers, stranders, chippers, engineered knife systems, industrial automation and control, recycling and approach flow systems, and virgin pulping process equipment for use in the packaging, tissue, wood products, and alternative fuel industries. The Material Handling segment offers conveying and vibratory equipment, and baling products; and manufactures and sells biodegradable absorbent granules for carriers in agricultural, home lawn and garden, professional lawn, turf, and ornamental applications, as well as for oil and grease absorption. The company markets and sells its products, services, and systems through direct sales, independent sales agents, and distributors. The company was formerly known as Thermo Fibertek, Inc. and changed its name to Kadant Inc. in July 2001. Kadant Inc. was incorporated in 1991 and is headquartered in Westford, Massachusetts.
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