Kadant (NYSE:KAI) & Broadwind Energy (NASDAQ:BWEN) Critical Analysis

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

Profitability

This table compares Broadwind Energy and Kadant’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Broadwind Energy	3.32%	-1.91%	-0.97%
Kadant	9.69%	11.57%	7.09%

Valuation and Earnings

This table compares Broadwind Energy and Kadant”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Broadwind Energy	$158.05 million	0.29	$5.24 million	$0.22	9.07
Kadant	$1.05 billion	3.32	$101.97 million	$8.65	34.23

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

Volatility and Risk

Broadwind Energy has a beta of 1.45, indicating that its share price is 45% more volatile than the S&P 500. Comparatively, Kadant has a beta of 1.22, indicating that its share price is 22% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for Broadwind Energy and Kadant, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Broadwind Energy	0	2	1	0	2.33
Kadant	0	2	1	0	2.33

Broadwind Energy currently has a consensus target price of $6.00, indicating a potential upside of 200.75%. Kadant has a consensus target price of $341.50, indicating a potential upside of 15.34%. Given Broadwind Energy’s higher possible upside, equities research analysts plainly believe Broadwind Energy is more favorable than Kadant.

Institutional & Insider Ownership

33.3% of Broadwind Energy shares are held by institutional investors. Comparatively, 96.1% of Kadant shares are held by institutional investors. 6.4% of Broadwind Energy shares are held by insiders. Comparatively, 1.2% of Kadant shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Kadant beats Broadwind Energy on 9 of the 12 factors compared between the two stocks.

About Broadwind Energy

Broadwind, Inc. manufactures and sells structures, equipment, and components for clean tech and other specialized applications primarily in the United States. It operates through three segments: Heavy Fabrications, Gearing, and Industrial Solutions. The Heavy Fabrications segment provides fabrications to various industrial markets. It offers steel towers and adapters primarily to wind turbine manufacturers. Its Gearing segment provides gearing, gearboxes, and precision machined components to a range of customers in diverse markets, including surface and underground mining, wind energy, steel, material handling, infrastructure, onshore and offshore oil and gas fracking and drilling, marine, and other industrial markets. This segment also offers heat treat services for aftermarket and original equipment manufacturer applications. The Industrial Solutions segment provides supply chain solutions for offering instrumentation and controls, valve assemblies, sensor devices, fuel system components, electrical junction boxes and wiring, energy storage services, and electromechanical devices; light fabrication, inventory management, and kitting and assembly services; packaging solutions; and supply chain solutions, light fabrication, inventory management, and kitting and assembly services for combined cycle natural gas turbine market. It sells its products to the energy, mining, and infrastructure sectors through its direct sales force and independent sales agents. The company was formerly known as Broadwind Energy, Inc. and changed its name to Broadwind, Inc. in May 2020. Broadwind, Inc. is headquartered in Cicero, Illinois.

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.