Critical Contrast: AeroVironment (NASDAQ:AVAV) versus Ducommun (NYSE:DCO)

AeroVironment (NASDAQ:AVAV) and Ducommun (NYSE:DCO) are both aerospace companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, risk, profitability, dividends, valuation and earnings.

Analyst Recommendations

This is a summary of recent ratings for AeroVironment and Ducommun, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AeroVironment	1	1	16	2	2.95
Ducommun	0	1	6	0	2.86

AeroVironment presently has a consensus target price of $356.07, suggesting a potential downside of 4.02%. Ducommun has a consensus target price of $97.50, suggesting a potential upside of 6.76%. Given Ducommun’s higher possible upside, analysts plainly believe Ducommun is more favorable than AeroVironment.

Insider & Institutional Ownership

86.4% of AeroVironment shares are held by institutional investors. Comparatively, 92.2% of Ducommun shares are held by institutional investors. 0.8% of AeroVironment shares are held by company insiders. Comparatively, 8.9% of Ducommun shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares AeroVironment and Ducommun’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AeroVironment	-4.14%	4.67%	3.73%
Ducommun	5.03%	7.61%	4.62%

Volatility and Risk

AeroVironment has a beta of 0.99, meaning that its share price is 1% less volatile than the S&P 500. Comparatively, Ducommun has a beta of 1.38, meaning that its share price is 38% more volatile than the S&P 500.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AeroVironment	$1.09 billion	17.06	$43.62 million	($0.64)	-579.68
Ducommun	$795.08 million	1.71	$31.50 million	$2.63	34.72

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

Summary

Ducommun beats AeroVironment on 9 of the 15 factors compared between the two stocks.

About AeroVironment

AeroVironment, Inc. designs, develops, produces, delivers, and supports a portfolio of robotic systems and related services for government agencies and businesses in the United States and internationally. It operates through Small Unmanned Aircraft Systems (SUAS), Tactical Missile System (TMS), Medium Unmanned Aircraft Systems (MUAS), and High Altitude Pseudo-Satellite Systems (HAPS) segments. The company supplies UAS, TMS, unmanned ground vehicle, and related services primarily to organizations within the U.S. Department of Defense, other federal agencies, and to international allied governments. It also designs, engineers, tools, and manufactures unmanned aerial and aircraft systems, including airborne platforms, payloads and payload integration, ground control systems, and ground support equipment and other items and services related to unmanned aircraft systems. In addition, the company offers small UAS products, including training, spare parts, product repair, product replacement, and the customer contracted operation. Further, it develops high-altitude pseudo-satellite UAS systems. AeroVironment, Inc. was incorporated in 1971 and is headquartered in Arlington, Virginia.

About Ducommun

Ducommun Incorporated provides engineering and manufacturing services for products and applications used primarily in the aerospace and defense, industrial, medical, and other industries in the United States. The company operates through two segments, Electronic Systems and Structural Systems. The Electronic Systems segment provides cable assemblies and interconnect systems; printed circuit board assemblies; electronic, electromechanical, and mechanical components and assemblies, as well as lightning diversion systems; and radar enclosures, aircraft avionics racks, shipboard communications and control enclosures, printed circuit board assemblies, cable assemblies, wire harnesses, interconnect systems, lightning diversion strips, surge suppressors, conformal shields, and other assemblies. The segment also supplies engineered products, including illuminated pushbutton switches and panels for aviation and test systems; microwave and millimeter switches and filters for radio frequency systems and test instrumentation; and motors and resolvers for motion control. In addition, this segment provides engineering expertise for aerospace system design, development, integration, and testing. The Structural Systems segment designs, engineers, and manufactures contoured aluminum, titanium, and Inconel aero structure components; structural assembly products, such as winglets, engine components, and fuselage structural panels; aerodynamic systems; and metal and composite bonded structures and assemblies comprising aircraft wing spoilers, large fuselage skins, rotor blades on rotary-wing aircraft and components, flight control surfaces, engine components, ammunition handling systems, and magnetic seals. It serves commercial aircraft, military fixed-wing aircraft, military and commercial rotary-wing aircraft, and space programs, as well as industrial, medical, and other end-use markets. The company was founded in 1849 and is headquartered in Santa Ana, California.