Head to Head Comparison: Kratos Defense & Security Solutions (NASDAQ:KTOS) and Innovative Solutions and Support (NASDAQ:ISSC)

Kratos Defense & Security Solutions (NASDAQ:KTOS) and Innovative Solutions and Support (NASDAQ:ISSC) are both aerospace companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, analyst recommendations, risk, dividends and valuation.

Insider and Institutional Ownership

75.9% of Kratos Defense & Security Solutions shares are owned by institutional investors. Comparatively, 28.5% of Innovative Solutions and Support shares are owned by institutional investors. 1.5% of Kratos Defense & Security Solutions shares are owned by company insiders. Comparatively, 5.9% of Innovative Solutions and Support shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Kratos Defense & Security Solutions and Innovative Solutions and Support’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kratos Defense & Security Solutions	1.63%	3.34%	2.58%
Innovative Solutions and Support	21.02%	30.44%	18.78%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Kratos Defense & Security Solutions and Innovative Solutions and Support, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kratos Defense & Security Solutions	0	5	16	1	2.82
Innovative Solutions and Support	0	0	2	4	3.67

Kratos Defense & Security Solutions presently has a consensus price target of $98.28, suggesting a potential upside of 33.42%. Innovative Solutions and Support has a consensus price target of $16.25, suggesting a potential downside of 33.62%. Given Kratos Defense & Security Solutions’ higher possible upside, research analysts plainly believe Kratos Defense & Security Solutions is more favorable than Innovative Solutions and Support.

Volatility & Risk

Kratos Defense & Security Solutions has a beta of 1.22, suggesting that its stock price is 22% more volatile than the S&P 500. Comparatively, Innovative Solutions and Support has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500.

Earnings & Valuation

This table compares Kratos Defense & Security Solutions and Innovative Solutions and Support”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kratos Defense & Security Solutions	$1.35 billion	10.25	$22.00 million	$0.13	566.62
Innovative Solutions and Support	$84.30 million	5.16	$15.63 million	$1.05	23.31

Kratos Defense & Security Solutions has higher revenue and earnings than Innovative Solutions and Support. Innovative Solutions and Support is trading at a lower price-to-earnings ratio than Kratos Defense & Security Solutions, indicating that it is currently the more affordable of the two stocks.

Summary

Kratos Defense & Security Solutions beats Innovative Solutions and Support on 8 of the 15 factors compared between the two stocks.

About Kratos Defense & Security Solutions

Kratos Defense & Security Solutions, Inc. engages in the provision of mission critical products, services and solutions for United States national security priorities. It operates through the Kratos Government Solutions (KGS) and Unmanned Systems (US) segments. The KGS segment consists of an aggregation of KGS operating segments, including microwave electronic products, space, satellite and cyber, training solutions. The US segment refers to the unmanned aerial, unmanned ground, unmanned seaborne and related command, control and communications system businesses. The company was founded on December 19, 1994, and is headquartered in Round Rock, TX.

About Innovative Solutions and Support

Innovative Solutions and Support, Inc., a systems integrator, designs, develops, manufactures, sells, and services flight guidance, autothrottles, and cockpit display systems in the United States and internationally. It offers flat panel display systems that replicate the display of analog or digital displays on one screen and replace existing displays in legacy aircraft, as well as used for security monitoring on-board aircraft and as tactical workstations on military aircraft; and flight deck management system, a navigation and performance computer that upgrade for commercial air transport aircraft. The company also provides integrated standby units, which incorporate the measurement and display of attitude, altitude, airspeed, and navigation data into a single backup navigation instrument for military, commercial air transport, and corporate/general aviation applications. In addition, it offers digital air data computers that calculate various air data parameters, such as altitude, airspeed, vertical speed, angle of attack, and other information; integrated air data computers and display units, which calculate and convey air data information; altitude displays that convey aircraft altitude measurements; airspeed displays that convey various airspeed measurements; and altitude alerters. Further, the company offers the engine and fuel displays that convey information related to fuel and oil levels, and engine activity, including oil and hydraulic pressure and temperature; integrated global navigation systems; ThrustSense, a full regime autothrottle; and utility management systems. It serves commercial air transport carriers and corporate/general aviation companies, the Department of Defense and its commercial contractors, aircraft operators, aircraft modification centers, government agencies, and foreign militaries, as well as original equipment manufacturers. Innovative Solutions and Support, Inc. was incorporated in 1988 and is based in Exton, Pennsylvania.