Snap-On (NYSE: SNA) and Kaman Corporation (NYSE:KAMN) are both consumer discretionary companies, but which is the better stock? We will compare the two companies based on the strength of their risk, analyst recommendations, institutional ownership, valuation, dividends, earnings and profitability.
Risk and Volatility
Snap-On has a beta of 1.05, meaning that its stock price is 5% more volatile than the S&P 500. Comparatively, Kaman Corporation has a beta of 0.7, meaning that its stock price is 30% less volatile than the S&P 500.
Insider and Institutional Ownership
93.1% of Snap-On shares are owned by institutional investors. Comparatively, 93.7% of Kaman Corporation shares are owned by institutional investors. 3.7% of Snap-On shares are owned by company insiders. Comparatively, 2.4% of Kaman Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
This is a breakdown of recent ratings for Snap-On and Kaman Corporation, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Snap-On presently has a consensus target price of $197.00, indicating a potential upside of 29.39%. Kaman Corporation has a consensus target price of $56.67, indicating a potential upside of 2.51%. Given Snap-On’s stronger consensus rating and higher probable upside, research analysts clearly believe Snap-On is more favorable than Kaman Corporation.
Snap-On pays an annual dividend of $2.84 per share and has a dividend yield of 1.9%. Kaman Corporation pays an annual dividend of $0.80 per share and has a dividend yield of 1.4%. Snap-On pays out 29.3% of its earnings in the form of a dividend. Kaman Corporation pays out 43.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Snap-On has increased its dividend for 7 consecutive years and Kaman Corporation has increased its dividend for 2 consecutive years. Snap-On is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation and Earnings
This table compares Snap-On and Kaman Corporation’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Snap-On||$3.83 billion||2.29||$971.00 million||$9.68||15.73|
|Kaman Corporation||$1.77 billion||0.87||$161.23 million||$1.85||29.88|
Snap-On has higher revenue and earnings than Kaman Corporation. Snap-On is trading at a lower price-to-earnings ratio than Kaman Corporation, indicating that it is currently the more affordable of the two stocks.
This table compares Snap-On and Kaman Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Snap-On beats Kaman Corporation on 15 of the 17 factors compared between the two stocks.
Snap-On Company Profile
Snap-on Incorporated is a manufacturer and marketer of tools, equipment, diagnostics, repair information and systems solutions. The Company’s segments include the Commercial & Industrial Group, the Snap-on Tools Group, the Repair Systems & Information Group, and Financial Services. The Commercial & Industrial Group consists of business operations serving a range of industrial and commercial customers, including customers in the aerospace, natural resources, government, power generation, transportation and technical education markets. The Snap-on Tools Group consists of business operations primarily serving vehicle service and repair technicians. The Repair Systems & Information Group consists of business operations serving other professional vehicle repair customers, primarily owners and managers of independent repair shops and original equipment manufacturer (OEM) dealership service and repair shops. Financial Services consists of the business operations of its finance subsidiaries.
Kaman Corporation Company Profile
Kaman Corporation conducts business in the aerospace and distribution markets. The Company operates through two segments: Distribution and Aerospace. The Company’s brands include KAflex, KAron and K-MAX. Distribution segment is a power transmission, motion control, and fluid power industrial distributor with operations throughout the United States. Distribution segment conducts business in the mechanical power transmission and bearings, electrical, automation and control, and fluid power product platforms and provides total solutions from system design and integration to machine parts and services to the national manufacturing industry. Aerospace segment produces and markets aircraft bearings and components; super precision, miniature ball bearings; metallic and composite aerostructures for commercial, military and general aviation fixed and rotary wing aircraft, and safe and arming solutions for missile and bomb systems for the United States and allied militaries.
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