Exelis (NYSE: XLS) and Kratos Defense & Security Solutions (NASDAQ:KTOS) are both industrials companies, but which is the better business? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, dividends, profitability and analyst recommendations.

Valuation & Earnings

This table compares Exelis and Kratos Defense & Security Solutions’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Exelis N/A N/A N/A N/A N/A
Kratos Defense & Security Solutions $701.00 million 1.66 $20.10 million ($0.66) -20.29

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

Profitability

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

Net Margins Return on Equity Return on Assets
Exelis 7.52% 18.51% 4.87%
Kratos Defense & Security Solutions -6.29% -1.40% -0.44%

Analyst Ratings

This is a summary of current ratings and recommmendations for Exelis and Kratos Defense & Security Solutions, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Exelis 0 0 0 0 N/A
Kratos Defense & Security Solutions 0 2 5 0 2.71

Kratos Defense & Security Solutions has a consensus target price of $12.89, suggesting a potential downside of 3.71%. Given Kratos Defense & Security Solutions’ higher probable upside, analysts plainly believe Kratos Defense & Security Solutions is more favorable than Exelis.

Insider & Institutional Ownership

73.3% of Kratos Defense & Security Solutions shares are held by institutional investors. 23.2% of Kratos Defense & Security Solutions shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Kratos Defense & Security Solutions beats Exelis on 5 of the 8 factors compared between the two stocks.

Exelis Company Profile

Exelis Inc. (Exelis) is a diversified aerospace, defense, information and services company. The Company delivers mission-critical solutions to military, government and commercial customers in the United States and globally. It operates in two segments: Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance (C4ISR) Electronics and Systems, and Information and Technical Services. Its C4ISR Electronics and Systems segment provides engineered systems and solutions, including: ISR systems; integrated electronic warfare systems; radar and sonar systems; electronic attack and release systems; communications solutions; space systems, and composite aerostructures. The Company’s Information and Technical Services segment provides a range of service solutions: systems integration; network design and development; air traffic management; cyber; intelligence; advanced engineering, and space launch and range-support.

Kratos Defense & Security Solutions Company Profile

Kratos Defense & Security Solutions, Inc. is a technology, intellectual property and proprietary product and solution company focused on the United States and its allies’ national security. The Kratos Government Solutions segment includes the operations of Defense Rocket Support Services, Microwave Electronics Division, Technical and Training Solutions, and Modular Systems, which provide technology-based defense solutions, involving products and services, with the focus relating to the nation’s Command, Control, Communications, Computing, Combat Systems, Intelligence, Surveillance and Reconnaissance requirements. The Unmanned Systems segment includes its unmanned aerial, ground, seaborne and command, control and communications system business. The Public Safety & Security segment provides integrated solutions for homeland security, public safety, critical infrastructure, and security and surveillance systems for government and commercial applications.

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