Critical Review: Astronics (NASDAQ:ATRO) & Leonardo DRS (NASDAQ:DRS)

Leonardo DRS (NASDAQ:DRS) and Astronics (NASDAQ:ATRO) are both aerospace companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, analyst recommendations, risk, dividends, institutional ownership and profitability.

Analyst Ratings

This is a summary of current ratings and recommmendations for Leonardo DRS and Astronics, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Leonardo DRS	0	2	7	0	2.78
Astronics	1	0	1	1	2.67

Leonardo DRS currently has a consensus price target of $46.75, suggesting a potential upside of 5.32%. Astronics has a consensus price target of $49.00, suggesting a potential upside of 3.75%. Given Leonardo DRS’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Leonardo DRS is more favorable than Astronics.

Profitability

This table compares Leonardo DRS and Astronics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Leonardo DRS	7.31%	11.02%	6.93%
Astronics	-0.45%	22.89%	9.16%

Earnings & Valuation

This table compares Leonardo DRS and Astronics”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Leonardo DRS	$3.42 billion	3.45	$213.00 million	$0.93	47.73
Astronics	$822.85 million	2.03	-$16.22 million	($0.12)	-393.58

Leonardo DRS has higher revenue and earnings than Astronics. Astronics is trading at a lower price-to-earnings ratio than Leonardo DRS, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

18.8% of Leonardo DRS shares are held by institutional investors. Comparatively, 56.7% of Astronics shares are held by institutional investors. 0.3% of Leonardo DRS shares are held by company insiders. Comparatively, 9.4% of Astronics shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

Leonardo DRS has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500. Comparatively, Astronics has a beta of 1.68, indicating that its stock price is 68% more volatile than the S&P 500.

Summary

Leonardo DRS beats Astronics on 9 of the 15 factors compared between the two stocks.

About Leonardo DRS

Leonardo DRS, Inc., together with its subsidiaries, provides defense electronic products and systems, and military support services. It operates through Advanced Sensing and Computing (ASC) segment, and Integrated Mission Systems (IMS) segments. The ASC segment designs, develops, and manufacture sensing and network computing technology that enables real-time situational awareness required for enhanced operational decision making and execution; and offers sensing capabilities span applications, such as missions requiring advanced detection, precision targeting and surveillance sensing, long range electro-optic/infrared, signals intelligence, and other intelligence systems including electronic warfare, ground vehicle sensing, active electronically scanned array tactical radars, dismounted soldier, and space sensing. This segment also provides network computing, which are utilized across a range of mission applications including platform computing on ground and shipboard for advanced battle management, combat systems, radar, command and control, tactical networks, tactical computing, and communications. The IMS segment designs, develops, manufacture, and integrates power conversion, control, and distribution systems, ship propulsion systems, motors and variable frequency drives, force protection systems, transportation, and logistics systems for the U.S. and allied defense customers. This segment also offers electrical propulsion systems, which includes power conversion, control, distribution, and propulsion systems, as well as power dense permanent magnet motors, energy storage systems and associated efficient, rugged, and compact power conversion, electrical actuation systems, as well as cooling technologies; and motor controllers, instrumentation and control equipment, electrical actuation systems, and thermal management systems. The company was incorporated in 1968 and is based in Arlington, Virginia. Leonardo DRS, Inc. operates as a subsidiary of Leonardo S.p.A.

About Astronics

Astronics Corporation, through its subsidiaries, designs and manufactures products for the aerospace, defense, and electronics industries in the United States, rest of North America, Asia, Europe, South America, and internationally. The company operates in two segments, Aerospace and Test Systems. The Aerospace segment offers lighting and safety systems, electrical power generation systems, distribution and seat motions systems, aircraft structures, avionics products, system certification, and other products. This segment serves airframe manufacturers (OEM) that build aircraft for the commercial, military, and general aviation markets; suppliers to OEMs; and aircraft operators, such as airlines; suppliers to the aircraft operators; and branches of the U.S. Department of Defense. The Test Systems segment designs, develops, manufactures, and maintains automated test systems that support the aerospace and defense, and mass transit industries, as well as training and simulation devices for commercial and military applications. It serves OEMs and prime government contractors for electronics and military products. Astronics Corporation was incorporated in 1968 and is headquartered in East Aurora, New York.