Head to Head Review: AeroVironment (AVAV) and Rockwell Collins (COL)

AeroVironment (NASDAQ: AVAV) and Rockwell Collins (NYSE:COL) are both aerospace companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, dividends, valuation, earnings and profitability.

Earnings and Valuation

This table compares AeroVironment and Rockwell Collins’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
AeroVironment $264.87 million 4.57 $12.47 million $0.84 60.44
Rockwell Collins $6.82 billion 3.23 $705.00 million $4.78 28.28

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

Analyst Ratings

This is a summary of recent ratings and recommmendations for AeroVironment and Rockwell Collins, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AeroVironment 0 4 0 0 2.00
Rockwell Collins 1 15 3 0 2.11

AeroVironment currently has a consensus price target of $39.00, indicating a potential downside of 23.18%. Rockwell Collins has a consensus price target of $124.18, indicating a potential downside of 8.15%. Given Rockwell Collins’ stronger consensus rating and higher probable upside, analysts clearly believe Rockwell Collins is more favorable than AeroVironment.

Risk & Volatility

AeroVironment has a beta of 1.24, meaning that its share price is 24% more volatile than the S&P 500. Comparatively, Rockwell Collins has a beta of 0.73, meaning that its share price is 27% less volatile than the S&P 500.

Insider and Institutional Ownership

77.6% of AeroVironment shares are owned by institutional investors. Comparatively, 78.0% of Rockwell Collins shares are owned by institutional investors. 11.0% of AeroVironment shares are owned by company insiders. Comparatively, 1.5% of Rockwell Collins shares are owned by company 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.

Dividends

Rockwell Collins pays an annual dividend of $1.32 per share and has a dividend yield of 1.0%. AeroVironment does not pay a dividend. Rockwell Collins pays out 27.6% of its earnings in the form of a dividend. AeroVironment has increased its dividend for 2 consecutive years.

Profitability

This table compares AeroVironment and Rockwell Collins’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AeroVironment 7.22% 5.40% 4.83%
Rockwell Collins 10.33% 22.00% 6.90%

Summary

Rockwell Collins beats AeroVironment on 11 of the 17 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 Rockwell Collins

Rockwell Collins, Inc. designs, produces and supports communications and aviation systems for commercial and military customers. The Company provides information management services through voice and data communication networks and solutions across the world. The Company operates through three segments: Commercial Systems, Government Systems and Information Management Services. The Commercial Systems segment supplies aviation electronics systems, products and services to customers located throughout the world. The Government Systems segment provides a range of electronic products, systems and services to customers including the United States Department of Defense, various ministries of defense, other government agencies and defense contractors around the world. The Information Management Services segment provides communications services, systems integration and security solutions across the aviation, airport, rail and nuclear security markets.

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