Critical Survey: KLX (NASDAQ:KLXI) versus Rexnord Corporation (RXN)

KLX (NASDAQ: KLXI) and Rexnord Corporation (NYSE:RXN) are both mid-cap aerospace companies, but which is the better business? We will compare the two companies based on the strength of their dividends, valuation, earnings, analyst recommendations, profitability, institutional ownership and risk.

Profitability

This table compares KLX and Rexnord Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
KLX 4.83% 4.43% 2.66%
Rexnord Corporation 4.22% 14.27% 3.95%

Earnings and Valuation

This table compares KLX and Rexnord Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
KLX $1.60 billion 1.50 $240.70 million $1.50 31.18
Rexnord Corporation $1.93 billion 1.34 $327.90 million $0.67 37.22

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

Volatility & Risk

KLX has a beta of 1.29, indicating that its share price is 29% more volatile than the S&P 500. Comparatively, Rexnord Corporation has a beta of 1.68, indicating that its share price is 68% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for KLX and Rexnord Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
KLX 0 2 3 0 2.60
Rexnord Corporation 0 1 4 0 2.80

KLX presently has a consensus price target of $55.00, suggesting a potential upside of 17.60%. Rexnord Corporation has a consensus price target of $26.00, suggesting a potential upside of 4.25%. Given KLX’s higher possible upside, analysts plainly believe KLX is more favorable than Rexnord Corporation.

Summary

Rexnord Corporation beats KLX on 7 of the 12 factors compared between the two stocks.

About KLX

KLX Inc. (KLX) is the distributor and service provider of aerospace fasteners and consumables. The Company offers ranges of aerospace hardware and consumables and inventory management services across the world. The Company operates through two segments: Aerospace Solutions Group (ASG) and Energy Services Group (ESG). The Company’s ASG segment service offerings include inventory management and replenishment, creative and differential supply chain solutions, such as third-party logistics programs, special packaging and bar-coding, parts kitting, quality assurance testing and a range of purchasing assistance programs, plus the electronic data interchange capability. The Company’s ESG segment products and services include onshore completion services, wireline services, fishing services and tools, down-hole completion and production services, pressure control, accommodations and related surface rental equipment, and remanufacturing shops.

About Rexnord Corporation

Rexnord Corporation is a multi-platform industrial company. The Company operates through two segments: Process & Motion Control platform, and Water Management platform. The Process & Motion Control platform designs, manufactures, markets and services a range of engineered mechanical components used within systems. The Process & Motion Control portfolio includes motion control products, shaft management products, aerospace components and related value-added services. Its Process & Motion Control brands include Rexnord, Rex, Euroflex, Falk, FlatTop, Link-Belt, Thomas and Tollok. The Water Management platform designs, procures and markets products that provide and enhance water quality, safety, flow control and conservation. The Water Management product portfolio includes professional grade water control and safety, water distribution and drainage, finish plumbing and site works products. Its products are marketed and sold under various brand names, including Zurn, Wilkins and VAG.

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