Comparing Key Technology (NASDAQ:KTEC) and Lydall (LDL)

Key Technology (NASDAQ: KTEC) and Lydall (NYSE:LDL) are both small-cap industrial products companies, but which is the better investment? We will compare the two companies based on the strength of their risk, dividends, earnings, profitabiliy, valuation, analyst recommendations and institutional ownership.

Insider and Institutional Ownership

44.9% of Key Technology shares are owned by institutional investors. Comparatively, 88.6% of Lydall shares are owned by institutional investors. 29.4% of Key Technology shares are owned by insiders. Comparatively, 5.0% of Lydall shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Key Technology and Lydall’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
Key Technology	$121.45 million	0.69	$7.10 million	$0.21	61.86
Lydall	$602.64 million	1.42	$85.72 million	$2.32	21.47

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

Analyst Ratings

This is a breakdown of recent ratings and target prices for Key Technology and Lydall, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Key Technology	0	0	0	0	N/A
Lydall	0	1	1	0	2.50

Lydall has a consensus price target of $63.00, suggesting a potential upside of 26.51%. Given Lydall’s higher probable upside, analysts plainly believe Lydall is more favorable than Key Technology.

Profitability

This table compares Key Technology and Lydall’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Key Technology	1.11%	2.16%	1.37%
Lydall	6.59%	17.52%	10.05%

Volatility and Risk

Key Technology has a beta of 1.05, suggesting that its share price is 5% more volatile than the S&P 500. Comparatively, Lydall has a beta of 1.7, suggesting that its share price is 70% more volatile than the S&P 500.

Summary

Lydall beats Key Technology on 11 of the 13 factors compared between the two stocks.

Key Technology Company Profile

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.

Lydall Company Profile

Lydall, Inc. designs and manufactures specialty engineered filtration media, industrial thermal insulating solutions, automotive thermal and acoustical barriers for filtration/separation and thermal/acoustical applications. The Company’s segments are Performance Materials, Technical Nonwovens, Thermal/Acoustical Metals and Thermal/Acoustical Fibers. The Performance Materials segment includes filtration, thermal insulation and life sciences filtration businesses. The Technical Nonwovens segment includes its industrial filtration and advanced materials products. The Thermal/Acoustical Metals segment includes its metal parts and related tooling used in automotive applications. The Thermal/Acoustical Fibers segment includes its fiber parts business and related tooling used in automotive applications. Its Filtration products include LydAir MG (Micro-Glass) Air Filtration Media, LydAir MB (Melt Blown) Air Filtration Media and Arioso Membrane Composite Media.