Head to Head Comparison: AeroVironment (AVAV) & Hexcel Corporation (HXL)

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for AeroVironment and Hexcel Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AeroVironment 0 4 0 0 2.00
Hexcel Corporation 0 6 6 0 2.50

AeroVironment currently has a consensus price target of $39.00, suggesting a potential downside of 23.77%. Hexcel Corporation has a consensus price target of $59.20, suggesting a potential downside of 2.46%. Given Hexcel Corporation’s stronger consensus rating and higher probable upside, analysts clearly believe Hexcel Corporation is more favorable than AeroVironment.

Volatility & Risk

AeroVironment has a beta of 1.24, meaning that its stock price is 24% more volatile than the S&P 500. Comparatively, Hexcel Corporation has a beta of 1.1, meaning that its stock price is 10% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
AeroVironment 7.22% 5.40% 4.83%
Hexcel Corporation 13.13% 18.40% 9.36%

Insider & Institutional Ownership

77.7% of AeroVironment shares are owned by institutional investors. Comparatively, 96.7% of Hexcel Corporation shares are owned by institutional investors. 11.0% of AeroVironment shares are owned by company insiders. Comparatively, 2.1% of Hexcel Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Hexcel Corporation pays an annual dividend of $0.50 per share and has a dividend yield of 0.8%. AeroVironment does not pay a dividend. Hexcel Corporation pays out 18.1% of its earnings in the form of a dividend.

Earnings & Valuation

This table compares AeroVironment and Hexcel Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
AeroVironment $272.42 million 4.38 $29.48 million $0.84 60.91
Hexcel Corporation $1.95 billion 2.79 $442.00 million $2.77 21.91

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

Summary

Hexcel Corporation beats AeroVironment on 11 of the 16 factors compared between the two stocks.

About AeroVironment

AeroVironment, Inc. designs, develops, produces, supports and operates a portfolio of products and services for government agencies, businesses and consumers. The Company operates through two segments: Unmanned Aircraft Systems (UAS), which focuses primarily on the design, development, production, support and operation of UAS and tactical missile systems that provide situational awareness, multi-band communications, force protection and other mission effects, and Efficient Energy Systems (EES), which focuses primarily on the design, development, production, marketing, support and operation of electric energy systems. The Company supplies UAS, tactical missile systems and related services primarily to organizations within the United States Department of Defense (DoD). The Company also supplies charging systems and services for electric vehicles (EVs), and power cycling and test systems to commercial, consumer and government customers.

About Hexcel Corporation

Hexcel Corporation is a composites company. The Company develops, manufactures, and markets lightweight, structural materials, including carbon fibers, specialty reinforcements, prepregs and other fiber-reinforced matrix materials, honeycomb, adhesives, engineered honeycomb and structures, for use in Commercial Aerospace, Space and Defense and Industrial markets. It operates in two segments: Composite Materials and Engineered Products. The Composite Materials segment consists of its carbon fiber, specialty reinforcements, resins, prepregs and other fiber-reinforced matrix materials, and honeycomb core product lines. The Engineered Products segment consists of lightweight structures, molded components, engineered core and honeycomb products with added functionality. Its products are used in a range of end applications, such as commercial and military aircraft, space launch vehicles and satellites, wind turbine blades, automotive, and recreational products.

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