Contrasting Kadant (NYSE:KAI) & Daimler Truck (OTCMKTS:DTRUY)
by Mitch Edgeman · The Markets DailyDaimler Truck (OTCMKTS:DTRUY – Get Free Report) and Kadant (NYSE:KAI – Get Free Report) are both industrials companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, profitability, dividends and earnings.
Profitability
This table compares Daimler Truck and Kadant’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Daimler Truck | 6.17% | 6.04% | 1.85% |
| Kadant | 9.81% | 14.05% | 8.00% |
Volatility & Risk
Daimler Truck has a beta of 0.12, suggesting that its share price is 88% less volatile than the S&P 500. Comparatively, Kadant has a beta of 1.19, suggesting that its share price is 19% more volatile than the S&P 500.
Insider & Institutional Ownership
96.1% of Kadant shares are owned by institutional investors. 1.3% of Kadant shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Dividends
Daimler Truck pays an annual dividend of $0.79 per share and has a dividend yield of 3.4%. Kadant pays an annual dividend of $1.44 per share and has a dividend yield of 0.5%. Daimler Truck pays out 158.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kadant pays out 14.5% of its earnings in the form of a dividend. Kadant has increased its dividend for 12 consecutive years.
Analyst Recommendations
This is a summary of current ratings and recommmendations for Daimler Truck and Kadant, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Daimler Truck | 0 | 2 | 5 | 2 | 3.00 |
| Kadant | 0 | 3 | 1 | 0 | 2.25 |
Kadant has a consensus target price of $357.50, suggesting a potential upside of 19.37%. Given Kadant’s higher probable upside, analysts plainly believe Kadant is more favorable than Daimler Truck.
Earnings and Valuation
This table compares Daimler Truck and Kadant”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Daimler Truck | $51.50 billion | 0.70 | $2.23 billion | $0.50 | 46.87 |
| Kadant | $1.05 billion | 3.36 | $101.97 million | $9.91 | 30.22 |
Daimler Truck has higher revenue and earnings than Kadant. Kadant is trading at a lower price-to-earnings ratio than Daimler Truck, indicating that it is currently the more affordable of the two stocks.
Summary
Kadant beats Daimler Truck on 11 of the 18 factors compared between the two stocks.
About Daimler Truck
Daimler Truck Holding AG is a global manufacturer of commercial vehicles, including heavy- and medium-duty trucks and buses. Its brands include Mercedes-Benz Trucks, Freightliner, Western Star, BharatBenz, FUSO, Setra and Thomas Built Buses. The company also provides parts, maintenance, digital and connected-vehicle services, and financing solutions. Headquartered in Leinfelden-Echterdingen, Germany, Daimler Truck serves customers across Europe, North America, Latin America and Asia. Its business includes vehicles and services for a range of commercial uses, from freight transport to passenger transit.
About Kadant
Kadant Inc. is a global supplier of technologies and engineered systems used in industrial processing and papermaking. Its products help customers manage fluids, process materials, and improve the efficiency of manufacturing operations. The company’s offerings include fluid-handling equipment such as rotary joints, syphons, and expansion joints; doctoring, cleaning, and filtration systems; and equipment for stock preparation and paper recycling. Kadant also provides material-processing technologies for applications including packaging, tissue, corrugated products, and other industrial markets.