Kratos Defense & Security Solutions (NASDAQ:KTOS) versus Saab (OTCMKTS:SAABY) Head to Head Analysis

Kratos Defense & Security Solutions (NASDAQ:KTOS) and Saab (OTCMKTS:SAABY) are both large-cap aerospace companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, valuation, analyst recommendations, dividends, earnings and risk.

Institutional & Insider Ownership

75.9% of Kratos Defense & Security Solutions shares are held by institutional investors. 2.4% of Kratos Defense & Security Solutions shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Kratos Defense & Security Solutions and Saab”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kratos Defense & Security Solutions	$1.14 billion	13.47	$16.30 million	$0.10	906.80
Saab	$6.03 billion	4.81	$394.58 million	$0.62	43.68

Saab has higher revenue and earnings than Kratos Defense & Security Solutions. Saab 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.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Kratos Defense & Security Solutions and Saab, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kratos Defense & Security Solutions	0	4	12	1	2.82
Saab	2	1	0	1	2.00

Kratos Defense & Security Solutions currently has a consensus price target of $77.36, indicating a potential downside of 14.69%. Given Kratos Defense & Security Solutions’ stronger consensus rating and higher probable upside, equities analysts clearly believe Kratos Defense & Security Solutions is more favorable than Saab.

Risk and Volatility

Kratos Defense & Security Solutions has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500. Comparatively, Saab has a beta of -0.02, suggesting that its stock price is 102% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Kratos Defense & Security Solutions	1.20%	3.10%	2.22%
Saab	7.17%	13.79%	5.13%

Summary

Kratos Defense & Security Solutions beats Saab on 8 of the 14 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 Saab

Saab AB (publ) provides products, services, and solutions for military defense, aviation, and civil security markets worldwide. The company operates through Aeronautics, Dynamics, Surveillance, Kockums, and Combitech segments. The company develops military aviation technology, as well as conducts studies on manned and unmanned aircraft. It also provides ground combat weapons, missile systems, torpedoes, unmanned underwater vehicles, training and simulation systems, and signature management systems for armed forces; and niche products for the civil and defense market, such as underwater vehicles for the offshore industry. In addition, the company offers solutions for safety and security, surveillance and decision support, and threat detection, location, and protection, including airborne, ground-based and naval radar, electronic warfare, and combat systems, as well as C4I solutions. Additionally, it provides submarines with the Stirling system for air independent propulsion, surface combatants, mine hunting systems, and autonomous vessels; and systems development, systems integration, information security, systems security, communications, mechanics, and technical product information and logistics. Saab AB (publ) was incorporated in 1937 and is headquartered in Stockholm, Sweden.