Comparing of AAR Corp. (AIR) and TransDigm Group Incorporated (NYSE:TDG)

Since AAR Corp. (NYSE:AIR) and TransDigm Group Incorporated (NYSE:TDG) are part of the Aerospace/Defense Products & Services industry, they are influenced by contrast. The influences particularly affect the analyst recommendations, profitability, risk, dividends, institutional ownership, earnings and valuation of both companies.

Earnings & Valuation

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AAR Corp. 1.89B 0.62 79.00M 1.78 19.79
TransDigm Group Incorporated 3.96B 5.88 821.26M 14.75 29.50

In table 1 we can see AAR Corp. and TransDigm Group Incorporated’s top-line revenue, earnings per share and valuation. TransDigm Group Incorporated seems to has higher revenue and earnings compared to AAR Corp. Presently more affordable of the two stocks is the business with a lower price-to-earnings ratio. AAR Corp.’s currently lower price-to-earnings ratio means it is more affordable than TransDigm Group Incorporated.

Profitability

Table 2 demonstrates the return on assets, return on equity and net margins of AAR Corp. and TransDigm Group Incorporated.

Net Margins Return on Equity Return on Assets
AAR Corp. 4.18% 5.3% 3.2%
TransDigm Group Incorporated 20.74% -41.3% 7%

Volatility and Risk

AAR Corp. has a beta of 1.02 and its 2.00% more volatile than Standard & Poor’s 500. TransDigm Group Incorporated’s 0.00% less volatile than Standard & Poor’s 500 which is a result of the 1 beta.

Liquidity

The Current Ratio and a Quick Ratio of AAR Corp. are 3 and 1.6. Competitively, TransDigm Group Incorporated has 4.1 and 3.2 for Current and Quick Ratio. TransDigm Group Incorporated’s better ability to pay short and long-term obligations than AAR Corp.

Dividends

AAR Corp. pays out $0.3 per share annually while its annual dividend yield is 0.88%. TransDigm Group Incorporated does not pay a dividend.

Analyst Recommendations

The next table highlights the shown recommendations and ratings for AAR Corp. and TransDigm Group Incorporated.

Sell Ratings Hold Ratings Buy Ratings Rating Score
AAR Corp. 0 0 2 3.00
TransDigm Group Incorporated 0 1 4 2.80

AAR Corp. has an average target price of $55.5, and a 62.33% upside potential. TransDigm Group Incorporated on the other hand boasts of a $478.67 average target price and a 8.82% potential upside. The results provided earlier shows that AAR Corp. appears more favorable than TransDigm Group Incorporated, based on analyst opinion.

Insider and Institutional Ownership

Institutional investors owned 95.9% of AAR Corp. shares and 23.38% of TransDigm Group Incorporated shares. Insiders owned roughly 3.4% of AAR Corp.’s shares. Comparatively, TransDigm Group Incorporated has 0.4% of it’s share owned by insiders.

Performance

In this table we provide the Weekly, Monthly, Quarterly, Half Yearly, Yearly and YTD Performance of both pretenders.

Performance (W) Performance (M) Performance (Q) Performance (HY) Performance (Y) Performance (YTD)
AAR Corp. -6.01% -6.58% -18.71% -24.46% -15% -5.73%
TransDigm Group Incorporated -0.22% 11.25% 20.63% 21.66% 52.86% 27.91%

For the past year AAR Corp. has -5.73% weaker performance while TransDigm Group Incorporated has 27.91% stronger performance.

Summary

TransDigm Group Incorporated beats AAR Corp. on 13 of the 16 factors.

AAR CORP. provides products and services to commercial aviation, government, and defense markets worldwide. The companyÂ’s Aviation Services segment offers aftermarket support and services; inventory management and distribution services; and maintenance, repair, and overhaul, as well as engineering services. This segment also sells and leases new, overhauled, and repaired engine and airframe parts and components; and provides inventory and repair programs, warranty claim management, and outsourcing programs for engine and airframe parts and components, as well as performance-based logistics programs in support of the U.S. Department of Defense (DoD) and foreign governments. In addition, it offers airframe inspection, maintenance, repair and overhaul, painting, line maintenance, airframe modification, structural repair, avionic and installation, exterior and interior refurbishment, and engineering and support services; repairs and overhauls landing gears, wheels, and brakes; and sells and leases used commercial aircraft. The companyÂ’s Expeditionary Services segment provides products and services supporting the movement of equipment and personnel by the U.S. DoD, foreign governments, and non-governmental organizations. Its expeditionary airlift services offer fixed- and rotary-wing flight operations, such as search and rescue operations, and transporting personnel and cargo. This segment also designs, manufactures, and repairs transportation pallets, and various containers and shelters, as well as composite materials for commercial, business, and military aircraft; and provides engineering, design, and system integration services for command and control systems. The company primarily markets and sells products and services through its employees and foreign sales representatives. As of May 31, 2017, its portfolio consisted of two aircraft owned through joint ventures. AAR CORP. was founded in 1951 and is headquartered in Wood Dale, Illinois.

TransDigm Group Incorporated designs, produces, and supplies aircraft components in the United States. The companyÂ’s Power & Control segment provides mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, specialized pumps and valves, power conditioning devices, specialized AC/DC electric motors and generators, databus and power controls, hoists, winches and lifting devices, and cargo loading and handling systems. This segment serves engine and power system and subsystem suppliers, airlines, third party maintenance suppliers, military buying agencies, and repair depots. Its Airframe segment offers engineered latching and locking devices, rods and locking devices, engineered connectors and elastomers, cockpit security components and systems, aircraft audio systems, lavatory components, seat belts and safety restraints, engineered interior surfaces and related components, lighting and control technology, military personnel parachutes, and cargo delivery systems. This segment serves airframe manufacturers, cabin system and subsystem suppliers, airlines, third party maintenance suppliers, military buying agencies, and repair depots. The companyÂ’s Non-aviation segment provides seat belts and safety restraints for ground transportation applications; mechanical/electro-mechanical actuators and controls for space applications; and refueling systems for heavy equipment. It serves off-road vehicle and subsystem, child restraint system, and satellite and space system suppliers; and manufacturers of heavy equipment. The company also offers aerospace pneumatic and hydraulic components and subsystems for commercial transport, regional, business jet, and military applications; extruded plastic interior parts for use in the commercial aerospace industry; faucets and related products for use on commercial transports and regional jets; and unit load devices. TransDigm Group Incorporated was founded in 1993 and is based in Cleveland, Ohio.