Arotech (ARTX) & Airbus (EADSY) Financial Analysis

Arotech (NASDAQ: ARTX) and Airbus (OTCMKTS:EADSY) are both aerospace companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, risk, analyst recommendations, earnings, dividends, profitability and institutional ownership.

Profitability

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This table compares Arotech and Airbus’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Arotech 3.88% 5.98% 3.61%
Airbus 4.27% 29.15% 2.55%

Analyst Recommendations

This is a breakdown of recent ratings for Arotech and Airbus, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Arotech 0 0 1 0 3.00
Airbus 0 1 0 0 2.00

Arotech currently has a consensus price target of $4.50, indicating a potential upside of 40.63%. Given Arotech’s stronger consensus rating and higher possible upside, research analysts clearly believe Arotech is more favorable than Airbus.

Institutional & Insider Ownership

22.3% of Arotech shares are owned by institutional investors. Comparatively, 1.2% of Airbus shares are owned by institutional investors. 9.2% of Arotech shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Risk & Volatility

Arotech has a beta of 1.39, meaning that its share price is 39% more volatile than the S&P 500. Comparatively, Airbus has a beta of 1.6, meaning that its share price is 60% more volatile than the S&P 500.

Earnings & Valuation

This table compares Arotech and Airbus’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Arotech $98.72 million 0.86 $3.83 million $0.16 20.00
Airbus $75.42 billion 1.18 $3.25 billion $1.04 27.68

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

Dividends

Airbus pays an annual dividend of $0.27 per share and has a dividend yield of 0.9%. Arotech does not pay a dividend. Airbus pays out 26.0% of its earnings in the form of a dividend.

Summary

Airbus beats Arotech on 9 of the 16 factors compared between the two stocks.

About Arotech

Arotech Corporation is a defense and security products and services company, engaged in providing interactive simulation for military, law enforcement and commercial markets, and batteries and charging systems for the military, commercial and medical markets. The Company operates through two segments: Training and Simulation Division, and Power Systems Division. The Company’s Training and Simulation Division develops, manufactures and markets multimedia and interactive digital solutions for engineering, use-of-force training and operator training of military, law enforcement, security, emergency services and other personnel. The Company’s Power Systems Division provides battery solutions, energy management and power distribution technologies and product design and manufacturing services for the aerospace, defense, law enforcement, homeland security markets, and it manufactures and sells rechargeable batteries for defense and security products and medical and industrial applications.

About Airbus

Airbus SE, through its subsidiaries, provides aerospace products, services, and solutions worldwide. The company operates through three segments: Airbus Commercial Aircraft, Airbus Helicopters, and Airbus Defence and Space segments. The Airbus Commercial Aircraft segment develops, manufactures, markets, and sells commercial jet aircraft of approximately 100 seats; and regional turboprop aircraft and aircraft components, as well as provides aircraft conversion and related services. The Airbus Helicopters segment develops, manufactures, markets, and sells civil and military helicopters; and offers helicopter related services for tactical transport and naval applications. The Airbus Defence and Space segment designs, develops, delivers, and supports military aircraft, such as combat, mission, transport, and tanker aircraft, as well as offers unmanned aerial systems and their associated services; civil and defence space systems for telecommunications, earth observations, navigation, science, and orbital systems; missile systems; and space launcher systems, as well as provides services around data processing from platforms, secure communication, and cyber security. The company was formerly known as Airbus Group SE and changed its name to Airbus SE in April 2017. Airbus SE was founded in 2000 and is headquartered in Leiden, the Netherlands.

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