Financial Comparison: VSE (NASDAQ:VSEC) vs. Carpenter Technology (NYSE:CRS)

VSE (NASDAQ:VSEC) and Carpenter Technology (NYSE:CRS) are both industrials companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, earnings, dividends, profitability and analyst recommendations.

Volatility and Risk

VSE has a beta of 1.24, indicating that its stock price is 24% more volatile than the S&P 500. Comparatively, Carpenter Technology has a beta of 1.26, indicating that its stock price is 26% more volatile than the S&P 500.

Profitability

This table compares VSE and Carpenter Technology’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
VSE	6.17%	6.71%	4.76%
Carpenter Technology	16.96%	26.46%	15.02%

Dividends

VSE pays an annual dividend of $0.40 per share and has a dividend yield of 0.2%. Carpenter Technology pays an annual dividend of $0.80 per share and has a dividend yield of 0.2%. VSE pays out 12.8% of its earnings in the form of a dividend. Carpenter Technology pays out 7.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for VSE and Carpenter Technology, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
VSE	0	4	8	1	2.77
Carpenter Technology	0	2	8	0	2.80

VSE presently has a consensus price target of $252.22, indicating a potential upside of 41.90%. Carpenter Technology has a consensus price target of $577.25, indicating a potential upside of 43.76%. Given Carpenter Technology’s stronger consensus rating and higher possible upside, analysts plainly believe Carpenter Technology is more favorable than VSE.

Earnings & Valuation

This table compares VSE and Carpenter Technology”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
VSE	$1.11 billion	4.48	$11.70 million	$3.12	56.97
Carpenter Technology	$3.12 billion	6.37	$529.80 million	$10.52	38.17

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

Institutional and Insider Ownership

91.5% of VSE shares are owned by institutional investors. Comparatively, 92.0% of Carpenter Technology shares are owned by institutional investors. 1.8% of VSE shares are owned by company insiders. Comparatively, 2.9% of Carpenter Technology shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Carpenter Technology beats VSE on 13 of the 16 factors compared between the two stocks.

About VSE

VSE Corporation operates as a diversified aftermarket products and services company in the United States. The company operates through two segments, Aviation and Fleet. The Aviation segment provides aftermarket parts supply and distribution; maintenance, repair, and overhaul services for components and engine accessories supporting commercial, business, and general aviation operators. This segment serves commercial airlines, regional airlines, cargo transporters, MRO integrators and providers, aviation manufacturers, corporate and private aircraft owners, and fixed-base operators. The Fleet segment offers parts supply, inventory management, e-commerce fulfillment, logistics, supply chain support, and other services to support the commercial aftermarket medium- and heavy-duty truck market. This segment also provides sale of vehicle parts and supply chain services to support client truck fleets, as well as sustainment solutions and managed inventory services to government and commercial truck fleets. VSE Corporation was incorporated in 1959 and is headquartered in Alexandria, Virginia.

About Carpenter Technology

Carpenter Technology Corporation engages in the manufacture, fabrication, and distribution of specialty metals in the United States, Europe, the Asia Pacific, Mexico, Canada, and internationally. It operates in two segments, Specialty Alloys Operations and Performance Engineered Products. The company offers specialty alloys, including titanium alloys, powder metals, stainless steels, alloy steels, and tool steels, as well as additives, and metal powders and parts. It serves to aerospace, defense, medical, transportation, energy, industrial, and consumer markets. The company was founded in 1889 and is headquartered in Philadelphia, Pennsylvania.