Analyzing AAR (NYSE:AIR) & Environmental Tectonics (OTCMKTS:ETCC)

AAR (NYSE:AIR) and Environmental Tectonics (OTCMKTS:ETCC) are both aerospace companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, analyst recommendations, risk, profitability and earnings.

Profitability

This table compares AAR and Environmental Tectonics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AAR	3.17%	12.40%	5.43%
Environmental Tectonics	15.91%	281.64%	11.13%

Analyst Ratings

This is a breakdown of current ratings and price targets for AAR and Environmental Tectonics, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AAR	0	2	4	1	2.86
Environmental Tectonics	0	0	0	0	0.00

AAR currently has a consensus target price of $110.80, indicating a potential upside of 4.74%. Given AAR’s stronger consensus rating and higher possible upside, research analysts plainly believe AAR is more favorable than Environmental Tectonics.

Insider & Institutional Ownership

90.7% of AAR shares are owned by institutional investors. 3.6% of AAR shares are owned by insiders. Comparatively, 74.8% of Environmental Tectonics shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Volatility and Risk

AAR has a beta of 1.24, indicating that its share price is 24% more volatile than the S&P 500. Comparatively, Environmental Tectonics has a beta of 0.49, indicating that its share price is 51% less volatile than the S&P 500.

Valuation and Earnings

This table compares AAR and Environmental Tectonics”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AAR	$2.78 billion	1.51	$12.50 million	$2.55	41.49
Environmental Tectonics	$62.94 million	0.15	$13.06 million	$0.60	1.62

Environmental Tectonics has lower revenue, but higher earnings than AAR. Environmental Tectonics is trading at a lower price-to-earnings ratio than AAR, indicating that it is currently the more affordable of the two stocks.

Summary

AAR beats Environmental Tectonics on 10 of the 15 factors compared between the two stocks.

About AAR

AAR Corp. provides products and services to commercial aviation, government, and defense markets worldwide. The Parts Supply segment leases and sells aircraft components and replacement parts. The Repair & Engineering segment provides airframe maintenance services, such as airframe inspection, painting, line maintenance, airframe modification, structural repair, avionics service and installation, exterior and interior refurbishment, and engineering and support services; component repair services comprising maintenance, repair, and overhaul (MRO) services, engine and airframe accessories, and interior refurbishment; and landing gear overhaul services, including repair services on wheels and brakes. This segment also develops specific aircraft components and parts; and designs proprietary designated engineering representative repairs. The Integrated Solutions segment engages in the fleet management and operation of customer-owned aircraft; provision of supply chain logistics services, such as material planning, sourcing, logistics, information and program management, and parts and component repair and overhaul services; and flight hour component inventory and repair services. In addition, the segment provides integrated software solutions comprising Trax, a cloud-based electronic enterprise resource platform, as well as a suite of paperless mobility apps for automating MRO workflows. The Expeditionary Services segment designs, manufactures, and repairs transportation pallets; and containers and shelters for military and humanitarian tactical deployment activities, including armories, supply and parts storage, refrigeration systems, tactical operation centers, briefing rooms, laundry and kitchen facilities, water treatment, and sleeping quarters, as well as engages in provision of engineering, design, and system integration services for specialized command and control systems. AAR Corp. was founded in 1951 and is headquartered in Wood Dale, Illinois.

About Environmental Tectonics

Environmental Tectonics Corporation, together with its subsidiaries, operates as an engineered solutions company in the United States and internationally. It operates in two segments, Aerospace Solutions (Aerospace) and Commercial/Industrial Systems (CIS). The Aerospace segment engages in the design, manufacture, and sale of aircrew training systems to commercial, governmental, and military defense agencies; training devices, including altitude and multiplace chambers to governmental and military defense agencies, and civil aviation organizations; and advanced disaster management simulators to governmental organizations, original equipment manufacturers, fire and emergency training schools, universities, and airports, as well as provides integrated logistics support services. The CIS segment is involved in the design, manufacture, and sale of steam and gas sterilizers to medical device and pharmaceutical manufacturers, as well as universities; and environmental testing and simulation systems primarily to commercial automotive, as well as to heating, ventilation, and air conditioning manufacturers. This segment also provides parts, as well as upgrade, maintenance, and repair services. The company markets its products through independent sales representatives and distributors. Environmental Tectonics Corporation was incorporated in 1969 and is headquartered in Southampton, Pennsylvania.