Comparing Redwire (NYSE:RDW) & AAR (NYSE:AIR)

Redwire (NYSE:RDW) and AAR (NYSE:AIR) are both mid-cap industrials companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, risk, profitability, institutional ownership and earnings.

Insider and Institutional Ownership

8.1% of Redwire shares are owned by institutional investors. Comparatively, 90.7% of AAR shares are owned by institutional investors. 0.8% of Redwire shares are owned by insiders. Comparatively, 3.1% of AAR shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Redwire and AAR, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Redwire	2	3	5	1	2.45
AAR	0	2	4	1	2.86

Redwire currently has a consensus target price of $14.44, suggesting a potential upside of 27.83%. AAR has a consensus target price of $135.60, suggesting a potential downside of 0.16%. Given Redwire’s higher probable upside, research analysts clearly believe Redwire is more favorable than AAR.

Profitability

This table compares Redwire and AAR’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Redwire	-57.26%	-11.02%	-8.17%
AAR	5.67%	12.67%	6.07%

Volatility and Risk

Redwire has a beta of 3.05, suggesting that its share price is 205% more volatile than the S&P 500. Comparatively, AAR has a beta of 1.11, suggesting that its share price is 11% more volatile than the S&P 500.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Redwire	$335.38 million	8.42	-$226.55 million	($1.46)	-7.74
AAR	$3.31 billion	1.64	$187.70 million	$4.83	28.12

AAR has higher revenue and earnings than Redwire. Redwire 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 Redwire on 10 of the 14 factors compared between the two stocks.

About Redwire

Redwire Corporation provides critical space solutions and space infrastructure for government and commercial customers in the United States, Europe, and internationally. The company provides avionics and sensors including star trackers, sun sensors, critical for navigation, and control of spacecraft; camera systems; solar array solutions for spacecraft spanning the spectrum of size, power needs, and orbital location; and strain composite booms, coilable booms, truss structures, telescope baffles, and deployable booms to position sensors or solar arrays away from the spacecraft. It offers software suite that enables digital engineering and generation of high-fidelity, interactive modeling and simulations of individual components, entire spacecraft, and full constellations in a cloud-based environment. In addition, the company microgravity payloads, radio frequency systems, antennas, star trackers, platforms, and in-space manufacturing and biotech facilities. Redwire Corporation is headquartered in Jacksonville, Florida.

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.