Contrasting Mayville Engineering (NYSE:MEC) & Kennametal (NYSE:KMT)

Mayville Engineering (NYSE:MEC) and Kennametal (NYSE:KMT) are both industrials companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, analyst recommendations, risk, valuation, institutional ownership and earnings.

Earnings and Valuation

This table compares Mayville Engineering and Kennametal”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mayville Engineering	$546.49 million	0.91	-$8.11 million	($0.84)	-23.32
Kennametal	$2.36 billion	1.00	$342.39 million	$4.40	7.02

Kennametal has higher revenue and earnings than Mayville Engineering. Mayville Engineering is trading at a lower price-to-earnings ratio than Kennametal, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations for Mayville Engineering and Kennametal, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mayville Engineering	1	1	4	0	2.50
Kennametal	4	5	0	0	1.56

Mayville Engineering currently has a consensus price target of $35.75, suggesting a potential upside of 82.49%. Kennametal has a consensus price target of $34.07, suggesting a potential upside of 10.33%. Given Mayville Engineering’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Mayville Engineering is more favorable than Kennametal.

Insider & Institutional Ownership

45.4% of Mayville Engineering shares are owned by institutional investors. 5.6% of Mayville Engineering shares are owned by insiders. Comparatively, 1.4% of Kennametal shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Mayville Engineering and Kennametal’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mayville Engineering	-2.95%	-6.63%	-2.99%
Kennametal	14.53%	24.83%	12.84%

Volatility & Risk

Mayville Engineering has a beta of 1.26, suggesting that its share price is 26% more volatile than the S&P 500. Comparatively, Kennametal has a beta of 1.34, suggesting that its share price is 34% more volatile than the S&P 500.

Summary

Kennametal beats Mayville Engineering on 9 of the 14 factors compared between the two stocks.

About Mayville Engineering

Mayville Engineering Company, Inc., together with its subsidiaries, engages in the production, design, prototyping and tooling, fabrication, aluminum extrusion, coating, and assembling of aftermarket components in the United States. It also supplies engineered components to original equipment manufacturers. The company serves heavy and medium duty commercial vehicles, construction and access equipment, powersports, agriculture, military, and other end markets. Mayville Engineering Company, Inc. was founded in 1945 and is headquartered in Milwaukee, Wisconsin.

About Kennametal

Kennametal Inc. engages in development and application of tungsten carbides, ceramics, and super-hard materials and solutions for use in metal cutting and extreme wear applications to enable customers work against corrosion and high temperatures conditions worldwide. The company operates through two segments, Metal Cutting and Infrastructure. It offers standard and custom products, including turning, milling, hole making, tooling systems, and services, as well as specialized wear components and metallurgical powders for manufacturers engaged in various industries, such as the manufacturers of transportation vehicles and components, machine tools, and light and heavy machinery; airframe and aerospace components; and energy-related components for the oil and gas industry, as well as power generation. In addition, the company provides specified product design, selection, application, and support services; and standard and custom metal cutting solutions to aerospace, general engineering, energy, and transportation customers. Further, it produces compacts, nozzles, frac seats, and custom components used in oil and gas, and petrochemical industries; rod blanks and abrasive water jet nozzles for general industries; earth cutting tools and systems used in underground mining, trenching and foundation drilling, and road milling; tungsten carbide powders for the oil and gas, aerospace, and process industries; and ceramics used by the packaging industry for metallization of films and papers. The company provides its products under the Kennametal, WIDIA, WIDIA Hanita, and WIDIA GTD brands through its direct sales force; a network of independent and national distributors; integrated supplier channels; and through the Internet. The company was founded in 1938 and is based in Pittsburgh, Pennsylvania.