Comparing Kadant (KAI) and Its Competitors

Kadant (NYSE:KAI) is one of 436 public companies in the “Machinery” industry, but how does it contrast to its peers? We will compare Kadant to similar companies based on the strength of its valuation, earnings, risk, dividends, institutional ownership, analyst recommendations and profitability.

Volatility & Risk

Kadant has a beta of 1.19, indicating that its share price is 19% more volatile than the S&P 500. Comparatively, Kadant’s peers have a beta of 5.10, indicating that their average share price is 410% more volatile than the S&P 500.

Dividends

Kadant pays an annual dividend of $1.44 per share and has a dividend yield of 0.5%. Kadant pays out 15.5% of its earnings in the form of a dividend. As a group, “Machinery” companies pay a dividend yield of 2.7% and pay out 24.6% of their earnings in the form of a dividend. Kadant has increased its dividend for 12 consecutive years.

Profitability

This table compares Kadant and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kadant	9.52%	13.16%	7.67%
Kadant Competitors	-1,044.46%	-15.08%	0.55%

Earnings & Valuation

This table compares Kadant and its peers gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Kadant	$1.05 billion	$101.97 million	30.76
Kadant Competitors	$4.65 billion	$364.05 million	3.71

Kadant’s peers have higher revenue and earnings than Kadant. Kadant is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Institutional & Insider Ownership

96.1% of Kadant shares are held by institutional investors. Comparatively, 51.7% of shares of all “Machinery” companies are held by institutional investors. 1.3% of Kadant shares are held by insiders. Comparatively, 14.3% of shares of all “Machinery” companies are held by 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.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Kadant and its peers, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kadant	0	3	1	0	2.25
Kadant Competitors	4191	14684	18185	803	2.41

Kadant currently has a consensus price target of $357.50, indicating a potential upside of 24.99%. As a group, “Machinery” companies have a potential upside of 29.34%. Given Kadant’s peers stronger consensus rating and higher probable upside, analysts plainly believe Kadant has less favorable growth aspects than its peers.

Summary

Kadant peers beat Kadant on 9 of the 15 factors compared.

Kadant Company Profile

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.