Freightcar America (NASDAQ:RAIL – Get Free Report) and Kadant (NYSE:KAI – Get Free Report) are both industrials companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, earnings, analyst recommendations, dividends, institutional ownership, valuation and risk.
Institutional & Insider Ownership
32.0% of Freightcar America shares are owned by institutional investors. Comparatively, 96.1% of Kadant shares are owned by institutional investors. 29.2% of Freightcar America shares are owned by company insiders. Comparatively, 1.3% of Kadant shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Profitability
This table compares Freightcar America and Kadant’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Freightcar America | -2.69% | -15.23% | 2.90% |
| Kadant | 9.52% | 13.16% | 7.67% |
Volatility and Risk
Freightcar America has a beta of 1.42, meaning that its share price is 42% more volatile than the S&P 500. Comparatively, Kadant has a beta of 1.21, meaning that its share price is 21% more volatile than the S&P 500.
Earnings & Valuation
This table compares Freightcar America and Kadant”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Freightcar America | $500.99 million | 0.28 | $38.10 million | ($0.54) | -7.83 |
| Kadant | $1.05 billion | 2.94 | $101.97 million | $9.30 | 28.17 |
Kadant has higher revenue and earnings than Freightcar America. Freightcar America is trading at a lower price-to-earnings ratio than Kadant, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of current ratings for Freightcar America and Kadant, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Freightcar America | 2 | 0 | 0 | 0 | 1.00 |
| Kadant | 0 | 3 | 1 | 0 | 2.25 |
Kadant has a consensus target price of $357.50, indicating a potential upside of 36.44%. Given Kadant’s stronger consensus rating and higher probable upside, analysts plainly believe Kadant is more favorable than Freightcar America.
Summary
Kadant beats Freightcar America on 12 of the 14 factors compared between the two stocks.
About Freightcar America
FreightCar America, Inc., through its subsidiaries, engages in design, manufacture, and sale of railcars and railcar components for the transportation of bulk commodities and containerized freight products in the United States and Mexico. It operates in two segments, Manufacturing and Parts. The company offers a range of railcars, including open top hoppers, mill gondola cars, intermodal and non-intermodal flat cars, coal cars; bulk commodity cars covered hopper cars, coil steel cars, boxcars, woodchip hoppers, aluminum vehicle carriers, and articulated bulk container railcars. It also sells used railcars; rebuilds, converts, and leases railcars; and sells forged, cast, and fabricated parts for various railcars. The company's customers primarily include shippers, railroads, and financial institutions. FreightCar America, Inc. was founded in 1901 and is headquartered in Chicago, Illinois.
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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