Critical Survey: TransDigm Group (TDG) & Astronics (ATRO)

TransDigm Group (NYSE: TDG) and Astronics (NASDAQ:ATRO) are both aerospace companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, profitability and dividends.

Earnings and Valuation

This table compares TransDigm Group and Astronics’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
TransDigm Group $3.50 billion 4.85 $596.88 million $12.01 27.00
Astronics $624.46 million 1.61 $19.67 million $1.25 28.62

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

Profitability

This table compares TransDigm Group and Astronics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TransDigm Group 19.77% -28.60% 6.84%
Astronics 1.75% 8.43% 4.12%

Risk and Volatility

TransDigm Group has a beta of 0.79, indicating that its stock price is 21% less volatile than the S&P 500. Comparatively, Astronics has a beta of 1.59, indicating that its stock price is 59% more volatile than the S&P 500.

Institutional & Insider Ownership

68.2% of Astronics shares are owned by institutional investors. 10.5% of TransDigm Group shares are owned by insiders. Comparatively, 16.6% of Astronics shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations for TransDigm Group and Astronics, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TransDigm Group 1 5 9 0 2.53
Astronics 0 2 1 0 2.33

TransDigm Group presently has a consensus price target of $328.85, indicating a potential upside of 1.39%. Astronics has a consensus price target of $41.67, indicating a potential upside of 16.48%. Given Astronics’ higher probable upside, analysts clearly believe Astronics is more favorable than TransDigm Group.

Summary

TransDigm Group beats Astronics on 8 of the 14 factors compared between the two stocks.

About TransDigm Group

TransDigm Group Incorporated designs, produces, and supplies aircraft components in the United States. The company's Power & Control segment offers 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. It serves engine and power system and subsystem suppliers, airlines, third party maintenance suppliers, military buying agencies, and repair depots. The Airframe segment provides engineered latching and locking devices, rods and locking devices, engineered connectors and elastomers, cockpit security components and systems, aircraft audio systems, specialized lavatory components, seat belts and safety restraints, engineered interior surfaces and related components, lighting and control technology, military personnel parachutes, and cargo delivery systems. It serves manufacturers, cabin system and subsystem suppliers, airlines, third party maintenance suppliers, military buying agencies, and repair depots. The Non-aviation segment offers 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 suppliers, child restraint system suppliers, 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 headquartered in Cleveland, Ohio.

About Astronics

Astronics Corporation, through its subsidiaries, designs and manufactures products for the aerospace, defense, electronics, and semiconductor industries worldwide. It operates in two segments, Aerospace and Test Systems. The Aerospace segment offers lighting and safety systems; electrical power generation, distribution, and motions systems; aircraft structures; avionics products; system certification; and connectivity and other products. This segment serves airframe manufacturers (OEM) that build aircraft for the commercial, military, and general aviation markets; suppliers; and aircraft operators, such as airlines and branches of the U.S. Department of Defense, as well as the Federal Aviation Administration and airport operators. The Test Systems segment designs, develops, manufactures, and maintains automated test systems that support the semiconductor, aerospace, communications, and weapons test systems, as well as training and simulation devices for commercial and military applications. It serves OEMs and prime government contractors for electronics and military products. The company also provides cabin management and in-flight entertainment systems for a range of aircraft, as well as design consultancy services for the aerospace industry. Astronics Corporation was founded in 1968 and is headquartered in East Aurora, New York.

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