Reviewing Wesco Aircraft (WAIR) & CAE (CAE)

Wesco Aircraft (NYSE: WAIR) and CAE (NYSE:CAE) are both aerospace companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, valuation, risk, dividends, institutional ownership, analyst recommendations and earnings.

Analyst Ratings

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This is a summary of recent ratings and price targets for Wesco Aircraft and CAE, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Wesco Aircraft 0 5 1 0 2.17
CAE 0 2 2 0 2.50

Wesco Aircraft presently has a consensus target price of $8.88, suggesting a potential downside of 12.13%. CAE has a consensus target price of $22.00, suggesting a potential upside of 24.08%. Given CAE’s stronger consensus rating and higher possible upside, analysts clearly believe CAE is more favorable than Wesco Aircraft.

Earnings and Valuation

This table compares Wesco Aircraft and CAE’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Wesco Aircraft $1.43 billion 0.70 -$237.34 million ($2.53) -3.99
CAE $2.06 billion 2.31 $191.59 million $0.91 19.48

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

Institutional and Insider Ownership

89.5% of Wesco Aircraft shares are owned by institutional investors. Comparatively, 52.1% of CAE shares are owned by institutional investors. 10.3% of Wesco Aircraft shares are owned by insiders. Comparatively, 18.3% of CAE shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

CAE pays an annual dividend of $0.29 per share and has a dividend yield of 1.6%. Wesco Aircraft does not pay a dividend. CAE pays out 31.9% of its earnings in the form of a dividend. Wesco Aircraft has raised its dividend for 2 consecutive years.

Profitability

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

Net Margins Return on Equity Return on Assets
Wesco Aircraft -17.26% 7.42% 2.96%
CAE 11.31% 13.03% 5.20%

Risk & Volatility

Wesco Aircraft has a beta of 0.28, suggesting that its share price is 72% less volatile than the S&P 500. Comparatively, CAE has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500.

Summary

CAE beats Wesco Aircraft on 14 of the 17 factors compared between the two stocks.

About Wesco Aircraft

Wesco Aircraft Holdings, Inc. is a distributor and provider of supply chain management services to the global aerospace industry. The Company operates through two segments: North America and Rest of World. As of September 30, 2016, the Company supplied over 565,000 active stock-keeping units (SKUs), including C-class hardware, chemicals, electronic components, bearings, tools and machined parts. The Company’s products include Hardware, Chemicals, Electronic Components, Bearings and Other Products. Its Services include Quality Assurance, Kitting and JIT Supply Chain Management. It caters to commercial, military and general aviation sectors, including the original equipment manufacturers (OEMs) and their subcontractors, through which it supports various Western aircraft programs, and also sells products to airline-affiliated and independent maintenance, repair and overhaul (MRO) providers. It also services industrial customers.

About CAE

CAE Inc. provides training for the civil aviation, defense and security, and healthcare markets. The Company designs and integrates training solutions. It operates through three segments: Civil Aviation Training Solutions, Defense and Security, and Healthcare. The Company provides training solutions for flight, cabin, maintenance and ground personnel in commercial, business and helicopter aviation, a range of flight simulation training devices, as well as ab initio pilot training and crew sourcing services. The Company is a training systems integrator for defense forces across the air, land and sea domains, and for government and civil security organizations responsible for public safety. The Company designs, manufactures and markets simulators, simulation center management solutions and courseware for training of medical and allied healthcare students and clinicians in educational institutions, hospitals and defense organizations across the world.

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