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

Risk & Volatility

Triumph Group has a beta of 1.76, indicating that its share price is 76% more volatile than the S&P 500. Comparatively, Arconic has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500.

Earnings and Valuation

This table compares Triumph Group and Arconic’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Triumph Group $3.53 billion 0.39 -$42.95 million ($2.13) -13.03
Arconic $12.39 billion 1.16 -$941.00 million ($2.15) -13.84

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

Dividends

Triumph Group pays an annual dividend of $0.16 per share and has a dividend yield of 0.6%. Arconic pays an annual dividend of $0.24 per share and has a dividend yield of 0.8%. Triumph Group pays out -7.5% of its earnings in the form of a dividend. Arconic pays out -11.2% 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. Arconic is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of recent ratings and price targets for Triumph Group and Arconic, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Triumph Group 2 5 3 0 2.10
Arconic 0 2 5 0 2.71

Triumph Group currently has a consensus price target of $33.11, indicating a potential upside of 19.32%. Arconic has a consensus price target of $30.00, indicating a potential upside of 0.81%. Given Triumph Group’s higher probable upside, research analysts clearly believe Triumph Group is more favorable than Arconic.

Profitability

This table compares Triumph Group and Arconic’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Triumph Group -3.18% 27.18% 5.39%
Arconic -4.70% 9.71% 2.73%

Institutional and Insider Ownership

99.8% of Triumph Group shares are held by institutional investors. Comparatively, 74.6% of Arconic shares are held by institutional investors. 2.8% of Triumph Group shares are held by insiders. Comparatively, 0.1% of Arconic shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Triumph Group beats Arconic on 10 of the 16 factors compared between the two stocks.

About Triumph Group

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.

About Arconic

Arconic Inc., formerly Alcoa Inc., is engaged in lightweight metals engineering and manufacturing. The Company operates through three segments: Global Rolled Products, Engineered Products and Solutions, and Transportation and Construction Solutions. Its multi-material products, which include aluminum, titanium and nickel, are used around the world in markets, such as aerospace, automotive, commercial transportation and packaging. The Global Rolled Products segment produces a range of aluminum sheet and plate products for the aerospace, automotive, commercial transportation, brazing and industrial markets. The Engineered Products and Solutions segment develops and manufactures products for the aerospace (commercial and defense), commercial transportation and power generation end markets. The Transportation and Construction Solutions segment produces products that are used in the non-residential building and construction and commercial transportation end markets.

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