In the ever-evolving landscape of industrial machinery, two prominent players stand out: Hillenbrand, Inc. (HI) and Kadant Inc. (KAI). Both companies operate within the same industry, yet they each have unique strategies that shape their market positions. Hillenbrand focuses on diversified industrial solutions, while Kadant emphasizes engineered systems and technologies. As I delve into their innovations and market approaches, I’ll help you uncover which of these companies might be the more compelling investment opportunity for your portfolio.
Table of contents
Company Overview
Hillenbrand, Inc. Overview
Hillenbrand, Inc. is a diversified industrial company that operates primarily in the United States and internationally. Founded in 1906 and headquartered in Batesville, Indiana, Hillenbrand is structured into three main segments: Advanced Process Solutions, Molding Technology Solutions, and Batesville. The company specializes in designing and manufacturing equipment for diverse industries, including food, pharmaceuticals, and automotive. Its Batesville segment is particularly notable for providing funeral services products. With a market cap of approximately $2.24B, Hillenbrand is positioned as a key player in the industrial machinery sector, focusing on innovation and customer-centric solutions.
Kadant Inc. Overview
Kadant Inc., headquartered in Westford, Massachusetts, supplies engineered systems and technologies globally. Established in 1991, the company operates through three segments: Flow Control, Industrial Processing, and Material Handling. Kadant develops a wide range of fluid-handling systems and industrial automation solutions, catering to industries such as packaging and wood products. With a market cap of around $3.28B, Kadant emphasizes efficiency and sustainability in its offerings. The company is well-regarded for its commitment to innovation and high-quality engineering, making it a formidable competitor in the industrial machinery space.
Key similarities and differences
Both Hillenbrand and Kadant operate within the industrial machinery sector and focus on providing engineered solutions across various industries. However, Hillenbrand has a notable emphasis on funeral services, while Kadant predominantly targets sectors like packaging and wood processing. This distinction reflects their differing market positions and areas of expertise.
Income Statement Comparison
The following table compares the most recent income statements of Hillenbrand, Inc. (HI) and Kadant Inc. (KAI), highlighting key financial metrics.
| Metric | Hillenbrand, Inc. | Kadant Inc. |
|---|---|---|
| Market Cap | 2.24B | 3.28B |
| Revenue | 2.67B | 1.05B |
| EBITDA | 230.6M | 222.7M |
| EBIT | 92.1M | 173.1M |
| Net Income | 43.1M | 111.6M |
| EPS | 0.74 | 9.51 |
| Fiscal Year | 2025 | 2024 |
Interpretation of Income Statement
In the latest fiscal year, Hillenbrand, Inc. experienced a decline in revenue, dropping from 3.18B in 2024 to 2.67B in 2025, reflecting a challenging market environment. Net income also decreased significantly, from -211M to 43M, indicating struggles with profitability. In contrast, Kadant Inc. showed robust growth, with revenue increasing from 957M in 2023 to 1.05B in 2024, and net income rising from 121M to 111M. The trends suggest that while Hillenbrand is facing headwinds, Kadant continues to capitalize on market opportunities, demonstrating effective margin management.
Financial Ratios Comparison
The following table provides a comparative overview of the most recent financial metrics for Company A (Hillenbrand, Inc.) and Company B (Kadant Inc.). This analysis will help investors evaluate which company may be a better fit for their investment portfolios.
| Metric | Hillenbrand (HI) | Kadant (KAI) |
|---|---|---|
| ROE | 3.66% | 13.17% |
| ROIC | -32.60% | 10.08% |
| P/E | 36.69 | 36.90 |
| P/B | 1.34 | 4.86 |
| Current Ratio | 1.22 | 2.31 |
| Quick Ratio | 0.88 | 1.55 |
| D/E | 1.12 | 0.38 |
| Debt-to-Assets | 35.86% | 11.57% |
| Interest Coverage | 0.55 | 8.55 |
| Asset Turnover | 0.60 | 0.74 |
| Fixed Asset Turnover | 7.80 | 6.18 |
| Payout ratio | 121.69% | 13.15% |
| Dividend yield | 3.32% | 0.36% |
Interpretation of Financial Ratios
The analysis highlights significant differences between the two companies. Hillenbrand shows weak ROE and ROIC, indicating challenges in profitability and capital efficiency, while Kadant demonstrates stronger financial health with higher ROE and ROIC. Hillenbrand’s high debt ratios and low interest coverage raise concerns about financial stability, whereas Kadant’s robust current and quick ratios suggest sound liquidity. Investors should weigh these factors carefully when considering potential investments.
Dividend and Shareholder Returns
Hillenbrand, Inc. (HI) pays a dividend with a yield of 3.32% and a payout ratio of 121.69%, indicating potential sustainability risks. While the company engages in share buybacks, the high payout relative to cash flow raises concerns. Conversely, Kadant Inc. (KAI) has a modest dividend yield of 0.36% and a lower payout ratio of 13.15%, coupled with consistent share buybacks, reflecting a prudent approach to capital management that may enhance long-term shareholder value.
Strategic Positioning
Hillenbrand, Inc. (HI) and Kadant Inc. (KAI) both operate within the industrial machinery sector, with respective market capitalizations of $2.24B and $3.28B. HI’s diverse offerings in process solutions and funeral services cater to various industries, while KAI specializes in fluid-handling and industrial processing systems. Competitive pressures remain high, with both companies facing technological disruptions and the need for continuous innovation to maintain market share. As an investor, I recognize the importance of closely monitoring these dynamics.
Stock Comparison
In this section, I analyze the stock price movements and trading dynamics of Hillenbrand, Inc. (HI) and Kadant Inc. (KAI) over the past year, highlighting key trends that investors should consider.
Trend Analysis
Hillenbrand, Inc. (HI) Over the past year, HI’s stock has experienced a significant decline, with a percentage change of -29.48%. This indicates a bearish trend, characterized by acceleration in the downward movement. The stock has fluctuated between a high of 50.29 and a low of 18.75, showcasing notable volatility with a standard deviation of 9.44.
In recent weeks, however, there has been a positive price change of 29.59%, suggesting a shift in momentum, although this is against the backdrop of the overall bearish trend.
Kadant Inc. (KAI) In contrast, KAI’s stock has shown a percentage change of +7.49% over the past year, indicating a bullish trend, although it is experiencing deceleration. The stock has reached a high of 419.01 and a low of 254.91, with a notable standard deviation of 35.59, reflecting considerable price volatility.
Recently, KAI has seen a decline of -11.29% over the last several weeks, which may signal a short-term correction in its otherwise upward trajectory.
Investors should weigh these trends carefully when considering future actions in their portfolios.
Analyst Opinions
Recent analyst recommendations for Hillenbrand, Inc. (HI) and Kadant Inc. (KAI) show a consensus rating of B+. Analysts note strong discounted cash flow scores of 4 for both companies, indicating solid future cash generation potential. However, concerns arise from lower scores in debt-to-equity and price-to-earnings, suggesting caution in financial leverage and valuation. Notably, analysts are leaning towards a hold position for both stocks, reflecting a balanced view amidst market uncertainties. Overall, while the outlook is cautiously optimistic, I advise investors to weigh risks carefully before making decisions.
Stock Grades
In the current market environment, it’s essential to analyze stock grades to make informed investment decisions. Here’s a look at the latest grades for Hillenbrand, Inc. and Kadant Inc.
Hillenbrand, Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| DA Davidson | maintain | Neutral | 2025-11-20 |
| DA Davidson | maintain | Neutral | 2025-10-16 |
| CJS Securities | downgrade | Market Perform | 2025-10-16 |
| Keybanc | downgrade | Sector Weight | 2025-05-08 |
| DA Davidson | maintain | Neutral | 2025-05-01 |
Kadant Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Barrington Research | maintain | Outperform | 2025-10-30 |
| Barrington Research | maintain | Outperform | 2025-10-29 |
| Barrington Research | maintain | Outperform | 2025-10-27 |
| Barrington Research | maintain | Outperform | 2025-10-10 |
| Barrington Research | maintain | Outperform | 2025-09-23 |
Overall, Hillenbrand, Inc. is experiencing a trend of downgrades towards a more neutral stance, indicating potential caution among analysts. Conversely, Kadant Inc. maintains a consistent outperform rating, suggesting a robust performance outlook from grading firms.
Target Prices
The current consensus target prices from analysts for Hillenbrand, Inc. (HI) and Kadant Inc. (KAI) are as follows:
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Hillenbrand, Inc. | 32 | 32 | 32 |
| Kadant Inc. | 410 | 275 | 342.5 |
For Hillenbrand, Inc., the target consensus aligns closely with its current price of 31.84, indicating stable expectations. In contrast, Kadant Inc.’s consensus of 342.5 suggests potential upside from its current price of 278.12, reflecting positive analyst sentiment.
Strengths and Weaknesses
Below is a comparative analysis of the strengths and weaknesses of Hillenbrand, Inc. (HI) and Kadant Inc. (KAI).
| Criterion | Hillenbrand, Inc. (HI) | Kadant Inc. (KAI) |
|---|---|---|
| Diversification | Moderate, operating in three segments: Process Solutions, Molding, and Batesville | High, diverse technologies across multiple industries |
| Profitability | Low net profit margin (1.95%) | Strong net profit margin (10.59%) |
| Innovation | Focus on industrial machinery innovations | Leading in engineered systems with robust R&D |
| Global presence | Moderate, primarily U.S. based with some international operations | Strong global footprint with clients in various countries |
| Market Share | Moderate within its sectors | High in niche markets like fluid-handling systems |
| Debt level | High debt-to-equity ratio (1.12) | Low debt-to-equity ratio (0.38) |
Key takeaways indicate that while both companies operate in the industrial machinery sector, Kadant Inc. exhibits stronger profitability and lower debt, suggesting a more stable financial position. Hillenbrand, although more diversified, faces challenges in profitability and higher leverage.
Risk Analysis
The following table summarizes the key risks associated with Hillenbrand, Inc. (HI) and Kadant Inc. (KAI) as of the most recent fiscal year.
| Metric | Hillenbrand, Inc. (HI) | Kadant Inc. (KAI) |
|---|---|---|
| Market Risk | High | Moderate |
| Regulatory Risk | Moderate | Low |
| Operational Risk | High | Moderate |
| Environmental Risk | Moderate | Low |
| Geopolitical Risk | Low | Moderate |
Both companies face considerable market and operational risks. Hillenbrand’s market risk stems from its diverse industrial segments, while Kadant’s exposure is more stable due to its specialized operations. As of 2024, both companies have been rated B+, indicating solid but cautious investor sentiment.
Which one to choose?
When comparing Hillenbrand, Inc. (HI) and Kadant Inc. (KAI), both companies exhibit strengths and weaknesses. HI has experienced a bearish trend with a notable price drop of 29.48%, while KAI’s stock has remained bullish, albeit with recent deceleration in growth. KAI shows higher gross and net profit margins (44.25% and 10.59% respectively) compared to HI’s (33.69% and 1.95%). Despite both companies receiving a rating of B+, KAI demonstrates better returns on equity and assets, indicating stronger operational efficiency.
For growth-focused investors, KAI appears more appealing due to its consistent upward trend and profitability. However, investors seeking stability may appreciate HI’s lower price-to-earnings ratio and potential for recovery.
Risks: Both companies face industry competition and market dependence risks.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Go further
I encourage you to read the complete analyses of Hillenbrand, Inc. and Kadant Inc. to enhance your investment decisions:
