Key Technology (NASDAQ: KTEC) and Altra Industrial Motion Corp. (NASDAQ:AIMC) are both small-cap industrial products companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, valuation, profitability and institutional ownership.

Dividends

Altra Industrial Motion Corp. pays an annual dividend of $0.68 per share and has a dividend yield of 1.5%. Key Technology does not pay a dividend. Altra Industrial Motion Corp. pays out 59.1% of its earnings in the form of a dividend.

Profitability

This table compares Key Technology and Altra Industrial Motion Corp.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Key Technology 2.58% 5.27% 3.31%
Altra Industrial Motion Corp. 4.17% 16.50% 6.29%

Risk & Volatility

Key Technology has a beta of 1.04, indicating that its share price is 4% more volatile than the S&P 500. Comparatively, Altra Industrial Motion Corp. has a beta of 1.64, indicating that its share price is 64% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and target prices for Key Technology and Altra Industrial Motion Corp., as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Key Technology 0 0 0 0 N/A
Altra Industrial Motion Corp. 0 1 2 0 2.67

Altra Industrial Motion Corp. has a consensus target price of $46.50, indicating a potential upside of 1.97%. Given Altra Industrial Motion Corp.’s higher possible upside, analysts plainly believe Altra Industrial Motion Corp. is more favorable than Key Technology.

Earnings and Valuation

This table compares Key Technology and Altra Industrial Motion Corp.’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Key Technology $129.89 million 0.76 $10.16 million $0.52 29.08
Altra Industrial Motion Corp. $784.57 million 1.70 $110.94 million $1.15 39.65

Altra Industrial Motion Corp. has higher revenue and earnings than Key Technology. Key Technology is trading at a lower price-to-earnings ratio than Altra Industrial Motion Corp., indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

44.6% of Key Technology shares are held by institutional investors. Comparatively, 98.4% of Altra Industrial Motion Corp. shares are held by institutional investors. 29.4% of Key Technology shares are held by insiders. Comparatively, 3.2% of Altra Industrial Motion Corp. shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Altra Industrial Motion Corp. beats Key Technology on 12 of the 15 factors compared between the two stocks.

About Key Technology

Key Technology, Inc. is a supplier of process automation solutions to the food processing industry and other industries, such as tobacco and pharmaceuticals. The Company designs, manufactures, sells and services automation equipment that processes product streams of discrete pieces. These systems integrate electro-optical automated inspection and digital sorting systems with other processing systems that include specialized conveying and preparation equipment. The Company provides parts and service for each of its product lines to customers around the world. Its automated inspection systems are used in various applications to detect and remove defects and foreign material from the product stream. It offers conveying and processing equipment, which are utilized throughout various industries to move and process product within a production plant. Its Integrated Solutions Group (ISG) provides integrated whole-line solutions. It has an installed base of inspection and processing systems.

About Altra Industrial Motion Corp.

Altra Industrial Motion Corp. is a designer, producer and marketer of a range of mechanical power transmission (MPT) components. The Company operates through three segments: Couplings, Clutches and Brakes; Electromagnetic Clutches and Brakes, and Gearing. It manufactures a range of couplings suitable for various industrial and specialty applications. The Electromagnetic Clutches and Brakes segment products include brakes and clutches that are used to electronically slow, stop, engage or disengage equipment utilizing electromagnetic friction type connections. The Gearing segment product lines include vertical and horizontal gear drives, speed reducers and increasers, high-speed compressor drives, enclosed custom gear drives, various enclosed gear drive and gear motor configurations, and open gearing products, such as spur, helical, worm and miter/bevel gears. Its products are used to control and transmit power and torque in virtually any industrial application involving movement.

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