Head-To-Head Contrast: B/E Aerospace (BEAV) vs. Kratos Defense & Security Solutions (KTOS)

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

Insider and Institutional Ownership

71.4% of Kratos Defense & Security Solutions shares are held by institutional investors. Comparatively, 92.0% of B/E Aerospace shares are held by institutional investors. 17.9% of Kratos Defense & Security Solutions shares are held by insiders. Comparatively, 0.5% of B/E Aerospace shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

B/E Aerospace pays an annual dividend of $0.84 per share and has a dividend yield of 1.3%. Kratos Defense & Security Solutions does not pay a dividend. B/E Aerospace pays out 27.3% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of current recommendations and price targets for Kratos Defense & Security Solutions and B/E Aerospace, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kratos Defense & Security Solutions 0 3 5 0 2.63
B/E Aerospace 0 3 0 0 2.00

Kratos Defense & Security Solutions presently has a consensus target price of $13.38, suggesting a potential upside of 31.26%. B/E Aerospace has a consensus target price of $61.67, suggesting a potential downside of 4.35%. Given Kratos Defense & Security Solutions’ stronger consensus rating and higher possible upside, analysts clearly believe Kratos Defense & Security Solutions is more favorable than B/E Aerospace.

Profitability

This table compares Kratos Defense & Security Solutions and B/E Aerospace’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kratos Defense & Security Solutions -3.39% -1.21% -0.45%
B/E Aerospace 8.25% 94.11% 6.79%

Valuation and Earnings

This table compares Kratos Defense & Security Solutions and B/E Aerospace’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kratos Defense & Security Solutions $668.70 million 1.57 -$60.50 million ($0.32) -31.84
B/E Aerospace N/A N/A N/A $3.08 20.93

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

Kratos Defense & Security Solutions Company Profile

Kratos Defense & Security Solutions, Inc. is a technology, intellectual property and proprietary product and solution company focused on the United States and its allies’ national security. The Kratos Government Solutions segment includes the operations of Defense Rocket Support Services, Microwave Electronics Division, Technical and Training Solutions, and Modular Systems, which provide technology-based defense solutions, involving products and services, with the focus relating to the nation’s Command, Control, Communications, Computing, Combat Systems, Intelligence, Surveillance and Reconnaissance requirements. The Unmanned Systems segment includes its unmanned aerial, ground, seaborne and command, control and communications system business. The Public Safety & Security segment provides integrated solutions for homeland security, public safety, critical infrastructure, and security and surveillance systems for government and commercial applications.

B/E Aerospace Company Profile

B/E Aerospace, Inc. is a manufacturer of cabin interior products for commercial aircraft and business jets. The Company sells its products and provides services directly to airlines and aerospace manufacturer. It operates through two segments. The Company manufactures aircraft seats, offering a selection of first class, business class, tourist class and regional aircraft seats. It manufactures and sells seats, which include the seat frame, cushions, armrests, tray table and a range of optional features, such as adjustable lumbar supports, electrical actuation systems, footrests, reading lights, head/neck supports and other comfort amenities. The business jet segment’s products include a range of business jet seating and sofa products, including electric fully berthing lie-flat seats, air valves and oxygen delivery systems as well as sidewalls, bulkheads, credenzas, closets, galley structures, lavatories, wastewater systems, de-icing systems, cabin management systems and tables.

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