Kratos Defense & Security Solutions (NASDAQ:KTOS) versus Environmental Tectonics (OTCMKTS:ETCC) Head-To-Head Analysis

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

Volatility & Risk

Environmental Tectonics has a beta of 0.47, suggesting that its share price is 53% less volatile than the S&P 500. Comparatively, Kratos Defense & Security Solutions has a beta of 1.11, suggesting that its share price is 11% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Environmental Tectonics	18.27%	-732.63%	12.79%
Kratos Defense & Security Solutions	1.20%	3.10%	2.22%

Institutional & Insider Ownership

75.9% of Kratos Defense & Security Solutions shares are held by institutional investors. 74.8% of Environmental Tectonics shares are held by company insiders. Comparatively, 2.4% of Kratos Defense & Security Solutions shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings for Environmental Tectonics and Kratos Defense & Security Solutions, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Environmental Tectonics	0	0	0	0	0.00
Kratos Defense & Security Solutions	0	6	12	1	2.74

Kratos Defense & Security Solutions has a consensus target price of $82.06, suggesting a potential upside of 10.73%. Given Kratos Defense & Security Solutions’ stronger consensus rating and higher possible upside, analysts clearly believe Kratos Defense & Security Solutions is more favorable than Environmental Tectonics.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Environmental Tectonics	$62.94 million	0.20	$13.06 million	$0.74	1.81
Kratos Defense & Security Solutions	$1.28 billion	9.74	$16.30 million	$0.13	570.08

Kratos Defense & Security Solutions has higher revenue and earnings than Environmental Tectonics. Environmental Tectonics 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 Environmental Tectonics on 11 of the 15 factors compared between the two stocks.

About Environmental Tectonics

Environmental Tectonics Corporation, together with its subsidiaries, operates as an engineered solutions company in the United States and internationally. It operates in two segments, Aerospace Solutions (Aerospace) and Commercial/Industrial Systems (CIS). The Aerospace segment engages in the design, manufacture, and sale of aircrew training systems to commercial, governmental, and military defense agencies; training devices, including altitude and multiplace chambers to governmental and military defense agencies, and civil aviation organizations; and advanced disaster management simulators to governmental organizations, original equipment manufacturers, fire and emergency training schools, universities, and airports, as well as provides integrated logistics support services. The CIS segment is involved in the design, manufacture, and sale of steam and gas sterilizers to medical device and pharmaceutical manufacturers, as well as universities; and environmental testing and simulation systems primarily to commercial automotive, as well as to heating, ventilation, and air conditioning manufacturers. This segment also provides parts, as well as upgrade, maintenance, and repair services. The company markets its products through independent sales representatives and distributors. Environmental Tectonics Corporation was incorporated in 1969 and is headquartered in Southampton, Pennsylvania.

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.