Reviewing Butler National (OTCMKTS:BUKS) & Virgin Galactic (NYSE:SPCE)

Butler National (OTCMKTS:BUKS) and Virgin Galactic (NYSE:SPCE) are both small-cap aerospace companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, valuation, risk, institutional ownership, dividends and analyst recommendations.

Insider and Institutional Ownership

5.0% of Butler National shares are held by institutional investors. Comparatively, 46.6% of Virgin Galactic shares are held by institutional investors. 17.6% of Butler National shares are held by insiders. Comparatively, 0.3% of Virgin Galactic shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings for Butler National and Virgin Galactic, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Butler National	0	0	0	0	0.00
Virgin Galactic	2	3	1	0	1.83

Virgin Galactic has a consensus target price of $4.20, suggesting a potential upside of 73.20%. Given Virgin Galactic’s stronger consensus rating and higher probable upside, analysts clearly believe Virgin Galactic is more favorable than Butler National.

Profitability

This table compares Butler National and Virgin Galactic’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Butler National	21.45%	28.47%	15.08%
Virgin Galactic	-17,615.71%	-108.00%	-32.35%

Earnings and Valuation

This table compares Butler National and Virgin Galactic”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Butler National	$83.97 million	3.85	$12.55 million	$0.30	13.47
Virgin Galactic	$1.66 million	106.77	-$346.74 million	($7.47)	-0.32

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

Volatility and Risk

Butler National has a beta of 0.19, meaning that its stock price is 81% less volatile than the S&P 500. Comparatively, Virgin Galactic has a beta of 2.23, meaning that its stock price is 123% more volatile than the S&P 500.

Summary

Butler National beats Virgin Galactic on 8 of the 14 factors compared between the two stocks.

About Butler National

Butler National Corporation, together with its subsidiaries, designs, engineers, manufactures, sells, integrates, installs, repairs, modifies, overhauls, services, and distributes a portfolio of aerostructures, aircraft components, avionics, accessories, subassemblies, and systems in North America, Europe, the Middle East, Asia, and internationally. It operates through two segments, Aerospace Products and Professional Services. The Aerospace Products segment provides aircraft modifications to business-size aircraft, which include passenger-to-freighter configuration, radar systems, addition of aerial photography capabilities, search and rescue, environmental research, mapping, intelligence surveillance reconnaissance modifications, and stability enhancing modifications for Learjet, Beechcraft, and Cessna aircraft along with other specialized modifications. This segment manufactures, sells, and services electronics for weapon control systems that are used on government aircraft and vehicles; and sells, installs, and repairs aircraft avionics equipment, including airplane radio equipment and flight control systems, as well as troubleshoots and repairs autopilot systems. Its Professional Services segment manages Boot Hill Casino and Resort, a gaming, dining, and entertainment facility in Dodge City, Kansas. The company acquires, refurbishes, and sells airplanes, primarily Learjets; owns properties; and operates a management consulting and administrative services firm that provides business planning and financial coordination to Indian tribes interested in owning and operating casinos. It serves the aviation industry, including owners and operators of private and commercial business and government aircraft and suppliers. Butler National Corporation was incorporated in 1960 and is headquartered in New Century, Kansas.

About Virgin Galactic

Virgin Galactic Holdings, Inc., an aerospace and space travel company, focuses on the development, manufacture, and operation of spaceships and related technologies. The company engages in the design and development, manufacturing, ground and flight testing, spaceflight operation, and post-flight maintenance of spaceflight systems for private individuals, researchers, and government agencies. Virgin Galactic Holdings, Inc. is headquartered in Tustin, California.