Head to Head Analysis: Hexcel (NYSE:HXL) & Bae Systems (OTCMKTS:BAESY)

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

Institutional & Insider Ownership

0.2% of Bae Systems shares are owned by institutional investors. Comparatively, 95.5% of Hexcel shares are owned by institutional investors. 1.8% of Hexcel shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Bae Systems and Hexcel’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bae Systems	N/A	N/A	N/A
Hexcel	6.07%	11.08%	5.66%

Dividends

Bae Systems pays an annual dividend of $2.37 per share and has a dividend yield of 2.2%. Hexcel pays an annual dividend of $0.72 per share and has a dividend yield of 0.8%. Hexcel pays out 47.4% of its earnings in the form of a dividend. Hexcel has increased its dividend for 3 consecutive years.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bae Systems	0	3	3	0	2.50
Hexcel	1	10	3	1	2.27

Hexcel has a consensus target price of $91.00, indicating a potential downside of 4.94%. Given Hexcel’s higher possible upside, analysts plainly believe Hexcel is more favorable than Bae Systems.

Risk & Volatility

Bae Systems has a beta of -0.08, meaning that its share price is 108% less volatile than the S&P 500. Comparatively, Hexcel has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500.

Valuation and Earnings

This table compares Bae Systems and Hexcel”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bae Systems	$37.36 billion	2.17	$2.72 billion	N/A	N/A
Hexcel	$1.89 billion	3.81	$109.40 million	$1.52	62.98

Bae Systems has higher revenue and earnings than Hexcel.

Summary

Hexcel beats Bae Systems on 10 of the 15 factors compared between the two stocks.

About Bae Systems

BAE Systems plc provides defense, aerospace, and security solutions worldwide. The company operates through five segments: Electronic Systems, Platforms & Services, Air, Maritime, and Cyber & Intelligence. The Electronic Systems segment offers electronic warfare systems, navigation systems, electro-optical sensors, military and commercial digital engine and flight controls, precision guidance and seeker solutions, military communication systems and data links, persistent surveillance capabilities, space electronics, and electric drive propulsion systems. The Cyber & Intelligence segment provides solutions to modernize, maintain, and test cyber-harden aircraft, radars, missile systems, and mission applications that detect and deter threats to national security; systems engineering, integration, and sustainment services for critical weapons systems, C5ISR, and cyber security; and solutions and services to intelligence and federal/civilian agencies. It also offers data intelligence solutions to protect nations, businesses, and citizens. The Platforms & Services segment manufactures, and upgrades combat vehicles, weapons, and munitions, as well as provides naval ship repair services and the management of government-owned ammunition plants. The Air segment develops future combat air systems and falconworks. The Maritime segment provides maritime and land activities, including submarine, ship build, and support programmes. BAE Systems plc was founded in 1970 and is headquartered in Camberley, the United Kingdom.

About Hexcel

Hexcel Corporation develops, manufactures, and markets carbon fibers, structural reinforcements, honeycomb structures, resins, and composite materials and parts for use in commercial aerospace, space and defense, and industrial applications. It operates through two segments, Composite Materials and Engineered Products. The Composite Materials segment manufactures and markets fabrics, multi-axials, specialty reinforcements, prepregs and other fiber-reinforced matrix materials, structural adhesives, molding compounds, tooling materials, polyurethane systems, and laminates that are used in military and commercial aircraft, wind turbine blades, recreational products, and other industrial applications, as well as in automotive, marine, and rail transportation. The Engineered Products segment manufactures and markets aircraft structures and finished aircraft components, including wing to body fairings, wing panels, flight deck panels, door liners, rotorcraft blades, spars, and tip caps; and aircraft structural sub-components and semi-finished components used in rotorcraft blades, engine nacelles, and aircraft surfaces, such as flaps, wings, elevators, and fairings; and RF interference control products for military and aerospace applications. This segment also provides interference control materials, structural composites, and services; dielectric absorber foams; magnetic absorbers; and thermoplastics for commercial and defense applications. The company sells its products directly through its managers, product managers, and sales personnel, as well as through independent distributors in the Americas, Europe, the Asia Pacific, India, and Africa. Hexcel Corporation was founded in 1946 and is headquartered in Stamford, Connecticut.