Financial Review: Hexcel (NYSE:HXL) and Boeing (NYSE:BA)

Boeing (NYSE:BA) and Hexcel (NYSE:HXL) are both industrials companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, risk, analyst recommendations, earnings, valuation, profitability and institutional ownership.

Dividends

Boeing pays an annual dividend of $8.22 per share and has a dividend yield of 4.7%. Hexcel pays an annual dividend of $0.72 per share and has a dividend yield of 0.9%. Boeing pays out 89.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hexcel pays out 32.3% of its earnings in the form of a dividend. Hexcel has raised its dividend for 3 consecutive years.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Boeing	7.98%	-42.40%	-1.53%
Hexcel	8.50%	13.57%	6.41%

Valuation & Earnings

This table compares Boeing and Hexcel”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Boeing	$94.91 billion	1.45	$2.23 billion	$9.19	18.86
Hexcel	$1.89 billion	3.26	$109.40 million	$2.23	36.58

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

Institutional and Insider Ownership

64.8% of Boeing shares are held by institutional investors. Comparatively, 95.5% of Hexcel shares are held by institutional investors. 0.1% of Boeing shares are held by company insiders. Comparatively, 1.8% of Hexcel shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility & Risk

Boeing has a beta of 1.34, indicating that its stock price is 34% more volatile than the S&P 500. Comparatively, Hexcel has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Boeing and Hexcel, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Boeing	3	8	21	1	2.61
Hexcel	0	9	4	1	2.43

Boeing currently has a consensus target price of $247.88, indicating a potential upside of 42.98%. Hexcel has a consensus target price of $101.67, indicating a potential upside of 24.64%. Given Boeing’s stronger consensus rating and higher probable upside, research analysts plainly believe Boeing is more favorable than Hexcel.

Summary

Hexcel beats Boeing on 9 of the 17 factors compared between the two stocks.

About Boeing

The Boeing Company is an aerospace manufacturer that designs, builds and supports commercial airplanes, defense products and space systems. Its commercial aircraft include the 737, 767, 777 and 787 families, which serve passenger and cargo operators around the world. Boeing’s defense, space and security business supplies military aircraft, helicopters, weapons, satellites and related systems, as well as services for government customers. Its Boeing Global Services business provides support such as maintenance, parts, training and logistics for commercial and government customers.

About Hexcel

Hexcel Corporation develops and manufactures advanced composite materials used in aerospace, defense and industrial applications. Its products help customers create lightweight, durable components for aircraft and other structures. The company’s offerings include carbon fiber, specialty reinforcements, prepregs, honeycomb materials, engineered core products and composite structures. These materials are used in commercial and military aircraft, space and defense systems, and a range of industrial applications.