Reviewing Kratos Defense & Security Solutions (NASDAQ:KTOS) & Carpenter Technology (NYSE:CRS)
by Sarita Garza · The Markets DailyCarpenter Technology (NYSE:CRS – Get Free Report) and Kratos Defense & Security Solutions (NASDAQ:KTOS – Get Free Report) are both industrials companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, profitability, valuation, analyst recommendations, institutional ownership and risk.
Institutional & Insider Ownership
92.0% of Carpenter Technology shares are owned by institutional investors. Comparatively, 75.9% of Kratos Defense & Security Solutions shares are owned by institutional investors. 2.9% of Carpenter Technology shares are owned by insiders. Comparatively, 1.5% of Kratos Defense & Security Solutions shares are owned 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 Recommendations
This is a summary of recent ratings and recommmendations for Carpenter Technology and Kratos Defense & Security Solutions, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Carpenter Technology | 0 | 1 | 8 | 1 | 3.00 |
| Kratos Defense & Security Solutions | 1 | 2 | 18 | 1 | 2.86 |
Carpenter Technology currently has a consensus target price of $577.25, suggesting a potential upside of 21.18%. Kratos Defense & Security Solutions has a consensus target price of $99.47, suggesting a potential upside of 108.01%. Given Kratos Defense & Security Solutions’ higher possible upside, analysts plainly believe Kratos Defense & Security Solutions is more favorable than Carpenter Technology.
Risk & Volatility
Carpenter Technology has a beta of 1.26, meaning that its stock price is 26% more volatile than the S&P 500. Comparatively, Kratos Defense & Security Solutions has a beta of 1.11, meaning that its stock price is 11% more volatile than the S&P 500.
Earnings & Valuation
This table compares Carpenter Technology and Kratos Defense & Security Solutions”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Carpenter Technology | $3.12 billion | 7.56 | $529.80 million | $10.52 | 45.28 |
| Kratos Defense & Security Solutions | $1.35 billion | 6.67 | $22.00 million | $0.17 | 281.29 |
Carpenter Technology has higher revenue and earnings than Kratos Defense & Security Solutions. Carpenter Technology 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.
Profitability
This table compares Carpenter Technology and Kratos Defense & Security Solutions’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Carpenter Technology | 16.96% | 26.46% | 15.02% |
| Kratos Defense & Security Solutions | 2.03% | 3.07% | 2.55% |
Summary
Carpenter Technology beats Kratos Defense & Security Solutions on 11 of the 14 factors compared between the two stocks.
About Carpenter Technology
Carpenter Technology Corporation engages in the manufacture, fabrication, and distribution of specialty metals in the United States, Europe, the Asia Pacific, Mexico, Canada, and internationally. It operates in two segments, Specialty Alloys Operations and Performance Engineered Products. The company offers specialty alloys, including titanium alloys, powder metals, stainless steels, alloy steels, and tool steels, as well as additives, and metal powders and parts. It serves to aerospace, defense, medical, transportation, energy, industrial, and consumer markets. The company was founded in 1889 and is headquartered in Philadelphia, Pennsylvania.
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.