Hurco Companies (NASDAQ:HURC – Get Free Report) and Kennametal (NYSE:KMT – Get Free Report) are both small-cap industrials companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, risk, dividends, institutional ownership, earnings, profitability and valuation.
Earnings & Valuation
This table compares Hurco Companies and Kennametal”s gross revenue, earnings per share and valuation.
Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
Hurco Companies | $183.63 million | 0.68 | -$16.61 million | ($2.99) | -6.43 |
Kennametal | $2.05 billion | 0.91 | $109.32 million | $1.39 | 17.59 |
Analyst Recommendations
This is a summary of recent ratings and recommmendations for Hurco Companies and Kennametal, as provided by MarketBeat.
Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
Hurco Companies | 0 | 0 | 0 | 0 | 0.00 |
Kennametal | 1 | 4 | 0 | 0 | 1.80 |
Kennametal has a consensus target price of $25.40, suggesting a potential upside of 3.87%. Given Kennametal’s stronger consensus rating and higher probable upside, analysts clearly believe Kennametal is more favorable than Hurco Companies.
Dividends
Hurco Companies pays an annual dividend of $0.64 per share and has a dividend yield of 3.3%. Kennametal pays an annual dividend of $0.80 per share and has a dividend yield of 3.3%. Hurco Companies pays out -21.4% of its earnings in the form of a dividend. Kennametal pays out 57.6% 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. Hurco Companies is clearly the better dividend stock, given its higher yield and lower payout ratio.
Volatility and Risk
Hurco Companies has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500. Comparatively, Kennametal has a beta of 1.4, meaning that its share price is 40% more volatile than the S&P 500.
Profitability
This table compares Hurco Companies and Kennametal’s net margins, return on equity and return on assets.
Net Margins | Return on Equity | Return on Assets | |
Hurco Companies | -10.58% | -9.54% | -7.33% |
Kennametal | 5.45% | 9.12% | 4.72% |
Insider & Institutional Ownership
74.4% of Hurco Companies shares are owned by institutional investors. 8.7% of Hurco Companies shares are owned by insiders. Comparatively, 1.4% of Kennametal shares are owned 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.
Summary
Kennametal beats Hurco Companies on 11 of the 15 factors compared between the two stocks.
About Hurco Companies
Hurco Companies, Inc., an industrial technology company, designs, manufactures, and sells computerized machine tools to companies in the metal cutting industry worldwide. Its principal products include general-purpose computerized machine tools, including vertical and horizontal machining centers, turning centers, and toolroom machines. The company also provides computer control systems and related software for press brake applications. In addition, it offers machine tool components, automation integration equipment, and solutions for job shops; and software options, control upgrades, and accessories and replacement parts for its products, as well as customer service, training, and applications support services. Further, the company provides Autobend computer control systems for press brake machines. It serves independent job shops and specialized short-run production applications within large manufacturing operations, as well as precision tool, die, and mold manufacturers in aerospace, defense, medical equipment, energy, automotive/transportation, electronics, and computer industries. The company sells its products under the Hurco, Milltronics, and Takumi brands through independent agents and distributors, as well as through its direct sales and service organizations. Hurco Companies, Inc. was incorporated in 1968 and is headquartered in Indianapolis, Indiana.
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.
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