Critical Analysis: American Defense Systems (OTCMKTS:ADFS) and VSE (NASDAQ:VSEC)

VSE (NASDAQ:VSEC) and American Defense Systems (OTCMKTS:ADFS) are both industrials companies, but which is the superior stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, risk, dividends, earnings and valuation.

Analyst Ratings

This is a summary of current ratings and target prices for VSE and American Defense Systems, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
VSE	0	3	8	1	2.83
American Defense Systems	0	0	0	0	0.00

VSE currently has a consensus price target of $252.22, indicating a potential upside of 24.50%. Given VSE’s stronger consensus rating and higher probable upside, equities research analysts clearly believe VSE is more favorable than American Defense Systems.

Volatility and Risk

VSE has a beta of 1.24, indicating that its stock price is 24% more volatile than the S&P 500. Comparatively, American Defense Systems has a beta of 10.92, indicating that its stock price is 992% more volatile than the S&P 500.

Profitability

This table compares VSE and American Defense Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
VSE	6.17%	6.71%	4.76%
American Defense Systems	N/A	N/A	N/A

Earnings & Valuation

This table compares VSE and American Defense Systems”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
VSE	$1.11 billion	5.11	$11.70 million	$3.12	64.93
American Defense Systems	N/A	N/A	N/A	N/A	N/A

VSE has higher revenue and earnings than American Defense Systems.

Insider & Institutional Ownership

91.5% of VSE shares are held by institutional investors. 1.8% of VSE shares are held by company insiders. Comparatively, 19.3% of American Defense Systems shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

VSE beats American Defense Systems on 9 of the 11 factors compared between the two stocks.

About VSE

VSE Corporation operates as a diversified aftermarket products and services company in the United States. The company operates through two segments, Aviation and Fleet. The Aviation segment provides aftermarket parts supply and distribution; maintenance, repair, and overhaul services for components and engine accessories supporting commercial, business, and general aviation operators. This segment serves commercial airlines, regional airlines, cargo transporters, MRO integrators and providers, aviation manufacturers, corporate and private aircraft owners, and fixed-base operators. The Fleet segment offers parts supply, inventory management, e-commerce fulfillment, logistics, supply chain support, and other services to support the commercial aftermarket medium- and heavy-duty truck market. This segment also provides sale of vehicle parts and supply chain services to support client truck fleets, as well as sustainment solutions and managed inventory services to government and commercial truck fleets. VSE Corporation was incorporated in 1959 and is headquartered in Alexandria, Virginia.

About American Defense Systems

American Defense Systems, Inc., together with its subsidiaries, engages in the design and supply of transparent and opaque armor solutions for military and commercial applications. It offers crew protection kits that provide armor protection of operator compartments; VistaSteel transparent armor, a laminated glass that provides defensive barrier to protect against firearms, physical attack, and explosive blasts; VistaSteel opaque armors; lightweight armor systems; and VistaGuard windows, which are forced entry blast resistant windows, window frames, and transparent armor assemblies used to mitigate forced entry, ballistic, and terrorist threats in high visibility targets. The company also provides portable transparent ballistic shield, a bullet-resistant transparent mobile shield; heated ballistic ship windows; and hardware products, such as hinges, rotary and slam latches, combat locks, and egress windows. Its armor solutions for construction equipment, and tactical and non-tactical transport vehicles are designed to protect their occupants from landmines, hostile fire, and improvised explosive devices. In addition, the company offers engineering and consulting services; and develops and installs detention and security hardware, entry control and monitoring systems, intrusion detection systems, and security glass. Its products are used in transport and fighting vehicles, construction equipment, sea craft, and various fixed structures, which require ballistic and blast attenuation. American Defense Systems, Inc. serves various branches of the United States military, including the United States Department of Defense; and other United States government, law enforcement, and correctional agencies, as well as private sector customers. The company was founded in 1994 and is headquartered in Lillington, North Carolina.