Critical Survey: Triumph Group (TGI) and Hexcel Corporation (NYSE:HXL)
Hexcel Corporation (NYSE: HXL) and Triumph Group (NYSE:TGI) are both aerospace companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitabiliy, analyst recommendations, institutional ownership, earnings, dividends and risk.
Institutional and Insider Ownership
99.8% of Triumph Group shares are owned by institutional investors. 2.1% of Hexcel Corporation shares are owned by insiders. Comparatively, 2.8% of Triumph Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Valuation and Earnings
This table compares Hexcel Corporation and Triumph Group’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Hexcel Corporation||$1.95 billion||2.43||$442.00 million||$2.73||19.32|
|Triumph Group||$3.42 billion||0.41||$400.81 million||($1.32)||-21.36|
Hexcel Corporation has higher revenue, but lower earnings than Triumph Group. Triumph Group is trading at a lower price-to-earnings ratio than Hexcel Corporation, indicating that it is currently the more affordable of the two stocks.
This table compares Hexcel Corporation and Triumph Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility & Risk
Hexcel Corporation has a beta of 1.04, indicating that its stock price is 4% more volatile than the S&P 500. Comparatively, Triumph Group has a beta of 1.67, indicating that its stock price is 67% more volatile than the S&P 500.
This is a breakdown of current recommendations for Hexcel Corporation and Triumph Group, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Hexcel Corporation presently has a consensus price target of $56.75, suggesting a potential upside of 7.58%. Triumph Group has a consensus price target of $29.90, suggesting a potential upside of 6.03%. Given Hexcel Corporation’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Hexcel Corporation is more favorable than Triumph Group.
Hexcel Corporation pays an annual dividend of $0.50 per share and has a dividend yield of 0.9%. Triumph Group pays an annual dividend of $0.16 per share and has a dividend yield of 0.6%. Hexcel Corporation pays out 18.3% of its earnings in the form of a dividend. Triumph Group pays out -12.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.
Hexcel Corporation beats Triumph Group on 9 of the 15 factors compared between the two stocks.
Hexcel Corporation Company Profile
Hexcel Corporation is a composites company. The Company develops, manufactures, and markets lightweight, structural materials, including carbon fibers, specialty reinforcements, prepregs and other fiber-reinforced matrix materials, honeycomb, adhesives, engineered honeycomb and structures, for use in Commercial Aerospace, Space and Defense and Industrial markets. It operates in two segments: Composite Materials and Engineered Products. The Composite Materials segment consists of its carbon fiber, specialty reinforcements, resins, prepregs and other fiber-reinforced matrix materials, and honeycomb core product lines. The Engineered Products segment consists of lightweight structures, molded components, engineered core and honeycomb products with added functionality. Its products are used in a range of end applications, such as commercial and military aircraft, space launch vehicles and satellites, wind turbine blades, automotive, and recreational products.
Triumph Group Company Profile
Triumph Group, Inc. designs, engineers, manufactures, repairs, overhauls and distributes a portfolio of aircraft components, accessories, subassemblies and systems. The Company offers a range of products and services to the aerospace industry through three segments: Triumph Aerostructures Group, whose companies are engaged in the design, manufacture, assembly and integration of metallic and composite aerostructures and structural components for the aerospace original equipment manufacturer (OEM) market; Triumph Aerospace Systems Group, whose companies design, engineer and manufacture a range of build-to-print components, assemblies and systems also for the OEM market, and Triumph Aftermarket Services Group, whose companies serve aircraft fleets, such as commercial airlines, the United States military and cargo carriers, through the maintenance, repair and overhaul (MRO) of aircraft components and accessories manufactured by third parties.
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