Analyzing Hexcel (NYSE:HXL) & AerSale (NASDAQ:ASLE)

Hexcel (NYSE:HXL) and AerSale (NASDAQ:ASLE) are both aerospace companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, earnings, profitability and risk.

Earnings and Valuation

This table compares Hexcel and AerSale”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hexcel	$1.89 billion	3.96	$109.40 million	$1.52	65.46
AerSale	$335.29 million	0.89	$8.57 million	$0.22	28.82

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Hexcel	6.07%	11.08%	5.66%
AerSale	3.06%	3.10%	2.00%

Risk and Volatility

Hexcel has a beta of 1.08, indicating that its stock price is 8% more volatile than the S&P 500. Comparatively, AerSale has a beta of 0.27, indicating that its stock price is 73% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Hexcel and AerSale, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hexcel	1	10	3	1	2.27
AerSale	1	3	0	0	1.75

Hexcel presently has a consensus price target of $91.00, suggesting a potential downside of 8.54%. AerSale has a consensus price target of $7.00, suggesting a potential upside of 10.41%. Given AerSale’s higher possible upside, analysts plainly believe AerSale is more favorable than Hexcel.

Institutional and Insider Ownership

95.5% of Hexcel shares are owned by institutional investors. Comparatively, 69.5% of AerSale shares are owned by institutional investors. 1.8% of Hexcel shares are owned by insiders. Comparatively, 20.1% of AerSale shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

Hexcel beats AerSale on 13 of the 15 factors compared between the two stocks.

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.

About AerSale

AerSale Corporation provides aftermarket commercial aircraft, engines, and its parts to passenger and cargo airlines, leasing companies, original equipment manufacturers, and government and defense contractors, as well as maintenance, repair, and overhaul (MRO) service providers worldwide. It operates in two segments, Asset Management Solutions and Technical Operations (TechOps). The Asset Management Solutions segment engages in the sale and lease of aircraft, engines, and airframes, as well as disassembly of these assets for component parts. The TechOps segment provides internal and third-party aviation services, including internally developed engineered solutions, heavy aircraft maintenance and modification, and component MRO, as well as end-of-life disassembly services. This segment provides aircraft modifications, cargo and tanker conversions of aircraft, and aircraft storage; and MRO services for landing gear, thrust reversers, hydraulic systems, and other aircraft components. The company was founded in 2008 and is headquartered in Coral Gables, Florida.