Ituran Location and Control (NASDAQ:ITRN) and Kadant (NYSE:KAI) are both industrial products companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, earnings, valuation, institutional ownership, risk, profitability and analyst recommendations.
Risk & Volatility
Ituran Location and Control has a beta of 1.38, suggesting that its stock price is 38% more volatile than the S&P 500. Comparatively, Kadant has a beta of 1.38, suggesting that its stock price is 38% more volatile than the S&P 500.
Dividends
Ituran Location and Control pays an annual dividend of $0.24 per share and has a dividend yield of 1.1%. Kadant pays an annual dividend of $0.96 per share and has a dividend yield of 0.6%. Ituran Location and Control pays out 15.2% of its earnings in the form of a dividend. Kadant pays out 17.9% 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. Kadant has increased its dividend for 7 consecutive years. Ituran Location and Control is clearly the better dividend stock, given its higher yield and lower payout ratio.
Profitability
This table compares Ituran Location and Control and Kadant's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Ituran Location and Control | -2.41% | 23.94% | 9.37% |
Kadant | 7.35% | 12.57% | 6.00% |
Earnings and Valuation
This table compares Ituran Location and Control and Kadant's top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Ituran Location and Control | $279.33 million | 1.82 | $6.89 million | $1.58 | 13.72 |
Kadant | $704.64 million | 2.84 | $52.07 million | $5.36 | 32.46 |
Kadant has higher revenue and earnings than Ituran Location and Control. Ituran Location and Control 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 and recommmendations for Ituran Location and Control and Kadant, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Ituran Location and Control | 0 | 1 | 0 | 0 | 2.00 |
Kadant | 0 | 2 | 1 | 0 | 2.33 |
Ituran Location and Control presently has a consensus price target of $16.00, suggesting a potential downside of 26.20%. Kadant has a consensus price target of $117.00, suggesting a potential downside of 32.76%. Given Ituran Location and Control's higher possible upside, equities research analysts clearly believe Ituran Location and Control is more favorable than Kadant.
Institutional & Insider Ownership
56.3% of Ituran Location and Control shares are owned by institutional investors. Comparatively, 95.6% of Kadant shares are owned by institutional investors. 2.3% of Kadant shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Summary
Kadant beats Ituran Location and Control on 11 of the 16 factors compared between the two stocks.