Hexcel (NYSE:HXL) and CAE (NYSE:CAE) Critical Survey

CAE (NYSE:CAE) and Hexcel (NYSE:HXL) are both aerospace companies, but which is the better investment? We will compare the two companies based on the strength of their risk, dividends, earnings, profitability, valuation, analyst recommendations and institutional ownership.

Valuation & Earnings

This table compares CAE and Hexcel”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CAE	$3.28 billion	3.34	$291.29 million	$0.97	35.13
Hexcel	$1.90 billion	3.46	$132.10 million	$0.85	97.22

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

Volatility and Risk

CAE has a beta of 1.15, suggesting that its share price is 15% more volatile than the S&P 500. Comparatively, Hexcel has a beta of 1.08, suggesting that its share price is 8% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for CAE and Hexcel, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CAE	0	6	4	2	2.67
Hexcel	2	9	3	0	2.07

CAE currently has a consensus price target of $34.33, suggesting a potential upside of 0.74%. Hexcel has a consensus price target of $74.33, suggesting a potential downside of 10.05%. Given CAE’s stronger consensus rating and higher probable upside, equities analysts plainly believe CAE is more favorable than Hexcel.

Profitability

This table compares CAE and Hexcel’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CAE	8.98%	7.60%	3.41%
Hexcel	3.67%	9.25%	5.15%

Insider and Institutional Ownership

67.4% of CAE shares are owned by institutional investors. Comparatively, 95.5% of Hexcel shares are owned by institutional investors. 18.3% of CAE shares are owned by insiders. Comparatively, 1.4% of Hexcel 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.

Summary

CAE beats Hexcel on 10 of the 15 factors compared between the two stocks.

About CAE

CAE Inc., together with its subsidiaries, provides simulation training and critical operations support solutions in Canada, the United States, the United Kingdom, Europe, Asia, the Oceania, Africa, and Rest of the Americas. It operates through two segments, Civil Aviation; and Defense and Security. The Civil Aviation segment offers training solutions for flight, cabin, maintenance, and ground personnel in commercial, business, and helicopter aviation; a range of flight simulation training devices; and ab initio pilot training and crew sourcing services, as well as aircraft flight operations solutions. The Defense and Security segment operates as a training and simulation provider that delivers platform-independent solutions to enable and enhance force readiness and security for defense forces, original equipment manufacturers (OEMs), government agencies, and public safety organizations. The company was formerly known as CAE Industries Ltd. and changed its name to CAE Inc. in 1993. CAE Inc. was incorporated in 1947 and is headquartered in Saint-Laurent, Canada.

About Hexcel

Hexcel Corporation develops, manufactures, and markets carbon fibers, structural reinforcements, honeycomb structures, resins, and composite materials and parts for use in commercial aerospace, space and defense, and industrial applications. It operates through two segments, Composite Materials and Engineered Products. The Composite Materials segment manufactures and markets fabrics, multi-axials, specialty reinforcements, prepregs and other fiber-reinforced matrix materials, structural adhesives, molding compounds, tooling materials, polyurethane systems, and laminates that are used in military and commercial aircraft, wind turbine blades, recreational products, and other industrial applications, as well as in automotive, marine, and rail transportation. The Engineered Products segment manufactures and markets aircraft structures and finished aircraft components, including wing to body fairings, wing panels, flight deck panels, door liners, rotorcraft blades, spars, and tip caps; and aircraft structural sub-components and semi-finished components used in rotorcraft blades, engine nacelles, and aircraft surfaces, such as flaps, wings, elevators, and fairings; and RF interference control products for military and aerospace applications. This segment also provides interference control materials, structural composites, and services; dielectric absorber foams; magnetic absorbers; and thermoplastics for commercial and defense applications. The company sells its products directly through its managers, product managers, and sales personnel, as well as through independent distributors in the Americas, Europe, the Asia Pacific, India, and Africa. Hexcel Corporation was founded in 1946 and is headquartered in Stamford, Connecticut.