Analyzing Avolon (AVOL) & Aercap (AER)

Avolon (NYSE: AVOL) and Aercap (NYSE:AER) are both mid-cap financials companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, dividends, earnings, profitability, analyst recommendations, institutional ownership and valuation.

Insider and Institutional Ownership

85.9% of Aercap shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Avolon and Aercap’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Avolon 28.83% 14.90% 3.31%
Aercap 22.84% 13.84% 2.88%

Valuation and Earnings

This table compares Avolon and Aercap’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Avolon N/A N/A N/A $1.83 16.90
Aercap $5.15 billion 1.59 $1.05 billion $6.78 7.67

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

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Avolon and Aercap, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Avolon 0 0 0 0 N/A
Aercap 0 1 7 0 2.88

Aercap has a consensus target price of $57.88, indicating a potential upside of 11.34%. Given Aercap’s higher probable upside, analysts plainly believe Aercap is more favorable than Avolon.

Summary

Aercap beats Avolon on 5 of the 8 factors compared between the two stocks.

Avolon Company Profile

Avolon Holdings Limited (Avolon Holdings) is a United States-based holding company, which provides aircraft leasing and lease management services. The Company operates through its wholly owned subsidiary Avolon S.a r.l. (Avolon), which is a global aircraft leasing company focused on acquiring, managing and selling commercial aircraft. Avolon’s owned, managed and committed Portfolio comprises 227 aircraft, including 122 owned, 12 managed and 93 committed aircraft. Avolon’s owned portfolio comprises primarily of narrowbody aircraft, including the Airbus A320 family and the Boeing 737-800, and select widebody aircraft, including the Airbus A330, the Boeing 777 and the Boeing 787. Avolon’s committed Portfolio includes 66 next generation Airbus A320neo, Boeing 737 MAX, Airbus A330neo and Boeing 787 family of aircraft. Avolon has a customer base of 49 customers across 27 countries across the world.

Aercap Company Profile

AerCap Holdings N.V. is an independent aircraft leasing company. The Company focuses on acquiring in-demand aircraft, funding them, hedging interest rate risk and using its platform to deploy these assets. It operates its business on a global basis, leasing aircraft to customers in various geographical regions. The Company is engaged in leasing, financing, sales and management of commercial aircraft and engines. It owned 1,022 aircraft, managed 95 aircraft and had approximately 420 new aircraft on order, which included 204 Airbus A320neo Family aircraft, 109 Boeing 737MAX aircraft, 50 Embraer E-Jets E2 aircraft, 38 Boeing 787 aircraft and 19 Airbus A350 aircraft, as of December 31, 2016. As of December 31, 2016, its owned and managed aircraft were leased to approximately 200 customers in approximately 80 countries. AeroTurbine, Inc. is the subsidiary of the Company.

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