Contrasting Kadant (NYSE:KAI) & DXP Enterprises (NASDAQ:DXPE)

DXP Enterprises (NASDAQ:DXPE) and Kadant (NYSE:KAI) are both industrials companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, earnings, profitability and valuation.

Risk & Volatility

DXP Enterprises has a beta of 1.25, indicating that its stock price is 25% more volatile than the S&P 500. Comparatively, Kadant has a beta of 1.24, indicating that its stock price is 24% more volatile than the S&P 500.

Earnings and Valuation

This table compares DXP Enterprises and Kadant”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DXP Enterprises	$1.80 billion	0.98	$70.49 million	$4.81	23.37
Kadant	$1.05 billion	3.61	$111.60 million	$8.98	35.96

Kadant has lower revenue, but higher earnings than DXP Enterprises. DXP Enterprises is trading at a lower price-to-earnings ratio than Kadant, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and price targets for DXP Enterprises and Kadant, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DXP Enterprises	0	0	1	0	3.00
Kadant	0	1	1	0	2.50

DXP Enterprises currently has a consensus target price of $95.00, suggesting a potential downside of 15.47%. Kadant has a consensus target price of $340.00, suggesting a potential upside of 5.30%. Given Kadant’s higher possible upside, analysts clearly believe Kadant is more favorable than DXP Enterprises.

Insider & Institutional Ownership

74.8% of DXP Enterprises shares are held by institutional investors. Comparatively, 96.1% of Kadant shares are held by institutional investors. 22.4% of DXP Enterprises shares are held by company insiders. Comparatively, 1.2% of Kadant shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares DXP Enterprises and Kadant’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DXP Enterprises	4.27%	20.41%	6.55%
Kadant	10.34%	12.62%	7.66%

Summary

Kadant beats DXP Enterprises on 8 of the 13 factors compared between the two stocks.

About DXP Enterprises

DXP Enterprises, Inc., together with its subsidiaries, engages in distributing maintenance, repair, and operating (MRO) products, equipment, and services in the United States and Canada. It operates through three segments: Service Centers (SC), Supply Chain Services (SCS), and Innovative Pumping Solutions (IPS). The SC segment offers MRO products, equipment, and integrated services, including technical expertise and logistics services. It offers a range of MRO products in the rotating equipment, bearing, power transmission, hose, fluid power, metal working, fastener, industrial supply, safety products, and safety services categories. This segment serves customers in the oil and gas, food and beverage, petrochemical, transportation, other general industrial, mining, construction, chemical, municipal, agriculture, and pulp and paper industries. The SCS segment manages procurement and inventory vinventory optimization and management, storeroom management, transaction consolidation and control, vendor oversight and procurement cost optimization, productivity improvement, and customized reporting services. Its programs include SmartAgreement, a procurement solution for various MRO categories; SmartBuy, an on-site or centralized MRO procurement solution; SmartSource, an on-site procurement and storeroom management solution; SmartStore, an e-Catalog solution; SmartVend, an industrial dispensing solution; and SmartServ, an integrated service pump solution. The IPS segment fabricates and assembles custom-made pump packages; remanufactures pumps; and manufactures branded private label pumps. DXP Enterprises, Inc. was founded in 1908 and is based in Houston, Texas.

About Kadant

Kadant Inc. supplies technologies and engineered systems worldwide. It operates in three segments: Flow Control, Industrial Processing, and Material Handling. The Flow Control segment develops, manufactures, and markets fluid-handling systems and equipment, such as rotary joints, syphons, turbulator bars, expansion joints, and engineered steam and condensate systems; and doctoring, cleaning, and filtration systems and related consumables consisting of doctor systems and holders, doctor blades, cleaning shower and fabric-conditioning systems, forming systems and wear surfaces, and water-filtration systems. The Industrial Processing segment develops, manufactures, and markets ring and rotary debarkers, stranders, chippers, engineered knife systems, industrial automation and control, recycling and approach flow systems, and virgin pulping process equipment for use in the packaging, tissue, wood products, and alternative fuel industries. The Material Handling segment offers conveying and vibratory equipment, and baling products; and manufactures and sells biodegradable absorbent granules for carriers in agricultural, home lawn and garden, professional lawn, turf, and ornamental applications, as well as for oil and grease absorption. The company markets and sells its products, services, and systems through direct sales, independent sales agents, and distributors. The company was formerly known as Thermo Fibertek, Inc. and changed its name to Kadant Inc. in July 2001. Kadant Inc. was incorporated in 1991 and is headquartered in Westford, Massachusetts.