Reviewing KLX (KLXIV) and Woodward (WWD)

KLX (NASDAQ: KLXIV) and Woodward (NASDAQ:WWD) are both mid-cap industrial machinery & equipment – nec companies, but which is the better stock? We will compare the two companies based on the strength of their earnings, risk, analyst recommendations, profitability, institutional ownership, dividends and valuation.

Insider and Institutional Ownership

71.3% of Woodward shares are owned by institutional investors. 5.9% of Woodward shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

Woodward pays an annual dividend of $0.50 per share and has a dividend yield of 0.6%. KLX does not pay a dividend. Woodward pays out 15.8% of its earnings in the form of a dividend.

Earnings & Valuation

This table compares KLX and Woodward’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
KLX N/A N/A N/A $1.38 39.82
Woodward $2.02 billion 2.36 $180.83 million $3.17 24.60

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

Profitability

This table compares KLX and Woodward’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
KLX 4.81% 3.68% 2.20%
Woodward 9.67% 16.12% 7.67%

Analyst Ratings

This is a breakdown of recent ratings and price targets for KLX and Woodward, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
KLX 0 0 0 0 N/A
Woodward 0 5 3 0 2.38

Woodward has a consensus target price of $74.75, indicating a potential downside of 4.15%. Given Woodward’s higher probable upside, analysts plainly believe Woodward is more favorable than KLX.

Summary

Woodward beats KLX on 10 of the 11 factors compared between the two stocks.

About KLX

KLX Inc. (KLX) is the distributor and service provider of aerospace fasteners and consumables. The Company offers ranges of aerospace hardware and consumables and inventory management services across the world. The Company operates through two segments: Aerospace Solutions Group (ASG) and Energy Services Group (ESG). The Company’s ASG segment service offerings include inventory management and replenishment, creative and differential supply chain solutions, such as third-party logistics programs, special packaging and bar-coding, parts kitting, quality assurance testing and a range of purchasing assistance programs, plus the electronic data interchange capability. The Company’s ESG segment products and services include onshore completion services, wireline services, fishing services and tools, down-hole completion and production services, pressure control, accommodations and related surface rental equipment, and remanufacturing shops.

About Woodward

Woodward, Inc. is an independent designer, manufacturer and service provider of energy control and optimization solutions. The Company designs, produces and services energy control products for various applications. The Company’s segments include Aerospace and Industrial. The Company’s Aerospace segment designs, manufactures and services systems and products for the management of fuel, air, combustion and motion control. The Company’s Industrial segment designs, produces and services systems and products for the management of fuel, air, fluids, gases, electricity, motion and combustion. The Company has production and assembly facilities in the United States, Europe and Asia and South America, and promotes its products and services throughout the world. The Company offers solutions for the aerospace, industrial and energy markets. The Company focuses primarily on serving original equipment manufacturers (OEMs) and equipment packagers.

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