Comparing Optex Systems (NASDAQ:OPXS) & Kratos Defense & Security Solutions (NASDAQ:KTOS)

Kratos Defense & Security Solutions (NASDAQ:KTOS) and Optex Systems (NASDAQ:OPXS) are both aerospace companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, risk, profitability and earnings.

Analyst Recommendations

This is a summary of recent ratings and target prices for Kratos Defense & Security Solutions and Optex Systems, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kratos Defense & Security Solutions	0	6	12	1	2.74
Optex Systems	0	0	1	0	3.00

Kratos Defense & Security Solutions presently has a consensus target price of $82.06, suggesting a potential upside of 8.07%. Given Kratos Defense & Security Solutions’ higher probable upside, equities research analysts clearly believe Kratos Defense & Security Solutions is more favorable than Optex Systems.

Profitability

This table compares Kratos Defense & Security Solutions and Optex Systems’ 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%
Optex Systems	13.01%	24.67%	19.20%

Volatility & Risk

Kratos Defense & Security Solutions has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500. Comparatively, Optex Systems has a beta of 0.45, indicating that its stock price is 55% less volatile than the S&P 500.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kratos Defense & Security Solutions	$1.28 billion	9.98	$16.30 million	$0.13	584.12
Optex Systems	$39.48 million	2.51	$3.77 million	$0.75	19.10

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

Insider & Institutional Ownership

75.9% of Kratos Defense & Security Solutions shares are held by institutional investors. Comparatively, 19.1% of Optex Systems shares are held by institutional investors. 2.4% of Kratos Defense & Security Solutions shares are held by insiders. Comparatively, 30.3% of Optex Systems shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Kratos Defense & Security Solutions beats Optex Systems on 9 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 Optex Systems

Optex Systems Holdings, Inc manufactures and sells optical sighting systems and assemblies primarily for the U.S. department of defense, foreign military applications, and commercial markets in the United States. It offers periscopes, such as laser and non-laser protected plastic and glass periscopes, electronic M17 day/thermal periscopes, and vision blocks; sighting systems, including back up sights, digital day and night sighting systems, M36 thermal periscope, unity mirrors, optical weapon system support and maintenance, commander weapon station sights, and sight assembly refurbishments; howitzers comprising M137 telescope, M187 mount, M119 aiming device, XM10 and aiming circles; and applied optics center consisting of laser interference filter, optical assemblies, laser filter units, day windows, and specialty thin film coatings, as well as other products, such as muzzle reference systems, binoculars, collimators, optical lenses and elements, and windows. The company also provides various periscope configurations, rifle and surveillance sights, and night vision optical assemblies. Its products are installed on various types of U.S. military land vehicles, such as the Abrams, Bradley, and Stryker families of fighting vehicles, as well as light armored and armored security vehicles. The company offers its products directly to the federal government, prime contractors, and foreign governments. Optex Systems Holdings, Inc was founded in 1987 and is headquartered in Richardson, Texas. Optex Systems Holdings, Inc is a subsidiary of Sileas Corporation.