Head to Head Analysis: Innovative Solutions and Support (NASDAQ:ISSC) & Hexcel (NYSE:HXL)

Hexcel (NYSE:HXL) and Innovative Solutions and Support (NASDAQ:ISSC) are both aerospace companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, earnings, dividends, profitability, valuation and risk.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Hexcel and Innovative Solutions and Support, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hexcel	2	8	3	0	2.08
Innovative Solutions and Support	0	1	2	2	3.20

Hexcel currently has a consensus target price of $73.33, indicating a potential downside of 1.60%. Innovative Solutions and Support has a consensus target price of $16.25, indicating a potential downside of 2.20%. Given Hexcel’s higher possible upside, equities analysts clearly believe Hexcel is more favorable than Innovative Solutions and Support.

Profitability

This table compares Hexcel and Innovative Solutions and Support’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hexcel	3.67%	9.25%	5.15%
Innovative Solutions and Support	18.54%	28.01%	16.84%

Valuation & Earnings

This table compares Hexcel and Innovative Solutions and Support”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hexcel	$1.90 billion	3.12	$132.10 million	$0.85	87.68
Innovative Solutions and Support	$84.30 million	3.48	$7.00 million	$0.66	25.17

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

Volatility and Risk

Hexcel has a beta of 1.06, suggesting that its stock price is 6% more volatile than the S&P 500. Comparatively, Innovative Solutions and Support has a beta of 0.77, suggesting that its stock price is 23% less volatile than the S&P 500.

Institutional and Insider Ownership

95.5% of Hexcel shares are held by institutional investors. Comparatively, 28.5% of Innovative Solutions and Support shares are held by institutional investors. 1.4% of Hexcel shares are held by insiders. Comparatively, 4.4% of Innovative Solutions and Support shares are held 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.

Summary

Hexcel beats Innovative Solutions and Support on 8 of the 15 factors compared between the two stocks.

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.

About Innovative Solutions and Support

Innovative Solutions and Support, Inc., a systems integrator, designs, develops, manufactures, sells, and services flight guidance, autothrottles, and cockpit display systems in the United States and internationally. It offers flat panel display systems that replicate the display of analog or digital displays on one screen and replace existing displays in legacy aircraft, as well as used for security monitoring on-board aircraft and as tactical workstations on military aircraft; and flight deck management system, a navigation and performance computer that upgrade for commercial air transport aircraft. The company also provides integrated standby units, which incorporate the measurement and display of attitude, altitude, airspeed, and navigation data into a single backup navigation instrument for military, commercial air transport, and corporate/general aviation applications. In addition, it offers digital air data computers that calculate various air data parameters, such as altitude, airspeed, vertical speed, angle of attack, and other information; integrated air data computers and display units, which calculate and convey air data information; altitude displays that convey aircraft altitude measurements; airspeed displays that convey various airspeed measurements; and altitude alerters. Further, the company offers the engine and fuel displays that convey information related to fuel and oil levels, and engine activity, including oil and hydraulic pressure and temperature; integrated global navigation systems; ThrustSense, a full regime autothrottle; and utility management systems. It serves commercial air transport carriers and corporate/general aviation companies, the Department of Defense and its commercial contractors, aircraft operators, aircraft modification centers, government agencies, and foreign militaries, as well as original equipment manufacturers. Innovative Solutions and Support, Inc. was incorporated in 1988 and is based in Exton, Pennsylvania.