Analyzing Kadant (NYSE:KAI) & Omnitek Engineering (OTCMKTS:OMTK)

Kadant (NYSE:KAI) and Omnitek Engineering (OTCMKTS:OMTK) are both industrials companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.

Insider and Institutional Ownership

96.1% of Kadant shares are held by institutional investors. 1.2% of Kadant shares are held by insiders. Comparatively, 45.5% of Omnitek Engineering shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Kadant and Omnitek Engineering, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kadant	0	2	1	0	2.33
Omnitek Engineering	0	0	0	0	0.00

Kadant currently has a consensus price target of $341.50, suggesting a potential upside of 17.72%. Given Kadant’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Kadant is more favorable than Omnitek Engineering.

Earnings and Valuation

This table compares Kadant and Omnitek Engineering”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kadant	$1.05 billion	3.25	$101.97 million	$8.65	33.54
Omnitek Engineering	$1.02 million	0.28	-$170,000.00	$0.02	0.65

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

Profitability

This table compares Kadant and Omnitek Engineering’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kadant	9.69%	11.57%	7.09%
Omnitek Engineering	18.80%	-22.26%	28.98%

Risk & Volatility

Kadant has a beta of 1.22, suggesting that its share price is 22% more volatile than the S&P 500. Comparatively, Omnitek Engineering has a beta of 0.11, suggesting that its share price is 89% less volatile than the S&P 500.

Summary

Kadant beats Omnitek Engineering on 11 of the 14 factors compared between the two stocks.

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.

About Omnitek Engineering

Omnitek Engineering Corp. develops and sells technology to convert diesel engines to an alternative fuel, natural gas engines, and complementary products in the United States and internationally. It offers conversion kits for converting diesel engines to run on an alternative fuel, including compressed, liquefied, and renewable natural gas, as well as liquid petroleum gas; natural gas engines and components; and high-pressure natural gas coalescing filters. The company's products are used for stationary applications; and the transportation market, such as light commercial vehicles, minibuses, heavy-duty trucks, and municipal buses, as well as rail and marine applications. It sells and delivers its products through its distributors, system integrators, fleet operators, and engine conversion companies, as well as directly to end-users. The company was incorporated in 2001 and is headquartered in Vista, California.