Critical Contrast: Astronics (NASDAQ:ATRO) & Kratos Defense & Security Solutions (NASDAQ:KTOS)

Kratos Defense & Security Solutions (NASDAQ:KTOS) and Astronics (NASDAQ:ATRO) are both aerospace companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, valuation, institutional ownership, earnings and dividends.

Insider & Institutional Ownership

75.9% of Kratos Defense & Security Solutions shares are held by institutional investors. Comparatively, 56.7% of Astronics shares are held by institutional investors. 2.4% of Kratos Defense & Security Solutions shares are held by insiders. Comparatively, 9.4% of Astronics shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings for Kratos Defense & Security Solutions and Astronics, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kratos Defense & Security Solutions	0	6	15	1	2.77
Astronics	1	0	3	2	3.00

Kratos Defense & Security Solutions presently has a consensus price target of $98.28, indicating a potential upside of 10.52%. Astronics has a consensus price target of $77.33, indicating a potential upside of 5.66%. Given Kratos Defense & Security Solutions’ higher probable upside, research analysts clearly believe Kratos Defense & Security Solutions is more favorable than Astronics.

Profitability

This table compares Kratos Defense & Security Solutions and Astronics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kratos Defense & Security Solutions	1.63%	3.34%	2.58%
Astronics	3.41%	39.95%	11.66%

Valuation and Earnings

This table compares Kratos Defense & Security Solutions and Astronics”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kratos Defense & Security Solutions	$1.35 billion	12.33	$22.00 million	$0.13	684.00
Astronics	$862.13 million	3.02	$29.36 million	$0.77	95.05

Astronics has lower revenue, but higher earnings than Kratos Defense & Security Solutions. Astronics is trading at a lower price-to-earnings ratio than Kratos Defense & Security Solutions, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Kratos Defense & Security Solutions has a beta of 1.12, indicating that its stock price is 12% more volatile than the S&P 500. Comparatively, Astronics has a beta of 1.06, indicating that its stock price is 6% more volatile than the S&P 500.

Summary

Astronics beats Kratos Defense & Security Solutions on 8 of the 15 factors compared between the two stocks.

About Kratos Defense & Security Solutions

Kratos Defense & Security Solutions, Inc. engages in the provision of mission critical products, services and solutions for United States national security priorities. It operates through the Kratos Government Solutions (KGS) and Unmanned Systems (US) segments. The KGS segment consists of an aggregation of KGS operating segments, including microwave electronic products, space, satellite and cyber, training solutions. The US segment refers to the unmanned aerial, unmanned ground, unmanned seaborne and related command, control and communications system businesses. The company was founded on December 19, 1994, and is headquartered in Round Rock, TX.

About Astronics

Astronics Corporation, through its subsidiaries, designs and manufactures products for the aerospace, defense, and electronics industries in the United States, rest of North America, Asia, Europe, South America, and internationally. The company operates in two segments, Aerospace and Test Systems. The Aerospace segment offers lighting and safety systems, electrical power generation systems, distribution and seat motions systems, aircraft structures, avionics products, system certification, and other products. This segment serves airframe manufacturers (OEM) that build aircraft for the commercial, military, and general aviation markets; suppliers to OEMs; and aircraft operators, such as airlines; suppliers to the aircraft operators; and branches of the U.S. Department of Defense. The Test Systems segment designs, develops, manufactures, and maintains automated test systems that support the aerospace and defense, and mass transit industries, as well as training and simulation devices for commercial and military applications. It serves OEMs and prime government contractors for electronics and military products. Astronics Corporation was incorporated in 1968 and is headquartered in East Aurora, New York.