Flow International Corp (NASDAQ: FLOW) and Kadant (NYSE:KAI) are both small-cap industrial machinery companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, analyst recommendations and earnings.

Profitability

This table compares Flow International Corp and Kadant’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Flow International Corp N/A N/A N/A
Kadant 8.17% 14.84% 8.02%

Analyst Recommendations

This is a breakdown of current ratings for Flow International Corp and Kadant, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Flow International Corp 1 2 5 0 2.50
Kadant 0 1 2 0 2.67

Flow International Corp currently has a consensus target price of $43.00, suggesting a potential upside of 4.12%. Kadant has a consensus target price of $94.00, suggesting a potential downside of 6.23%. Given Flow International Corp’s higher probable upside, equities research analysts clearly believe Flow International Corp is more favorable than Kadant.

Institutional and Insider Ownership

92.1% of Kadant shares are held by institutional investors. 5.6% of Kadant shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Flow International Corp and Kadant’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Flow International Corp N/A N/A N/A $0.04 1,032.50
Kadant $414.13 million 2.67 $32.07 million $3.37 29.75

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

Dividends

Kadant pays an annual dividend of $0.84 per share and has a dividend yield of 0.8%. Flow International Corp does not pay a dividend. Kadant pays out 24.9% of its earnings in the form of a dividend. Flow International Corp has raised its dividend for 3 consecutive years.

Summary

Kadant beats Flow International Corp on 9 of the 13 factors compared between the two stocks.

About Flow International Corp

SPX FLOW, Inc. provides various engineered solutions worldwide. The company engineers, designs, manufactures, and markets products and solutions used to process, blend, filter, dry, meter, and transport fluids with a focus on original equipment installation, including turn-key systems, modular systems, and components, as well as aftermarket components and support services. It operates through three segments: Food and Beverage, Power and Energy, and Industrial. The Food and Beverage segment offers mixing, drying, evaporation, and separation systems and components; heat exchangers, and reciprocating and centrifugal pump technologies; and turn-key systems primarily under the Anhydro, APV, Bran+Luebbe, Gerstenberg Schroeder, LIGHTNIN, Seital, and Waukesha Cherry-Burrell brands. The Power and Energy segment provides pumps, valves, and related accessories primarily for customers in oil and gas, and nuclear and other conventional power industries under the APV, Bran+Luebbe, ClydeUnion Pumps, Copes-Vulcan, Dollinger Filtration, LIGHTNIN, M&J Valve, Plenty, and Vokes brands. The Industrial segment offers air dryers, filtration equipment, mixers, pumps, hydraulic technologies, and heat exchangers under the Airpel, APV, Bolting Systems, Delair, Deltech, Hankison, Jemaco, Johnson Pump, LIGHTNIN, Power Team, and Stone brands. It primarily serves customers in chemical, air treatment, mining, pharmaceutical, marine, shipbuilding, infrastructure construction, general industrial, and water treatment industries. SPX FLOW, Inc. is headquartered in Charlotte, North Carolina.

About Kadant

Kadant Inc. is a supplier of equipment and components used in process industries. In addition, the Company manufactures granules made from papermaking by-products. Its segments include Papermaking Systems and Wood Processing Systems. The Company has a customer base, which includes paper and oriented strand board (OSB) manufacturers. Papermaking Systems segment is engaged in developing, manufacturing, and marketing equipment for the global papermaking and paper recycling industries. Its Papermaking Systems segment consists of product lines, including Stock-Preparation; Doctoring, Cleaning, & Filtration, and Fluid-Handling. The Company develops, manufactures and markets stranders and related equipment used in the production of OSB.

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