Head to Head Review: Transdigm Group (NYSE:TDG) & Woodward (NASDAQ:WWD)

Woodward (NASDAQ:WWD) and Transdigm Group (NYSE:TDG) are both large-cap aerospace companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, valuation, institutional ownership, earnings, dividends, profitability and analyst recommendations.

Analyst Recommendations

This is a breakdown of recent ratings for Woodward and Transdigm Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Woodward	0	4	8	0	2.67
Transdigm Group	1	5	13	1	2.70

Woodward presently has a consensus target price of $286.67, indicating a potential downside of 5.53%. Transdigm Group has a consensus target price of $1,576.29, indicating a potential upside of 17.12%. Given Transdigm Group’s stronger consensus rating and higher possible upside, analysts plainly believe Transdigm Group is more favorable than Woodward.

Volatility and Risk

Woodward has a beta of 1.02, meaning that its stock price is 2% more volatile than the S&P 500. Comparatively, Transdigm Group has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500.

Insider & Institutional Ownership

81.2% of Woodward shares are held by institutional investors. Comparatively, 95.8% of Transdigm Group shares are held by institutional investors. 0.8% of Woodward shares are held by company insiders. Comparatively, 4.1% of Transdigm Group shares are held by company 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.

Profitability

This table compares Woodward and Transdigm Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Woodward	12.39%	17.68%	9.35%
Transdigm Group	21.69%	-31.91%	9.53%

Valuation & Earnings

This table compares Woodward and Transdigm Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Woodward	$3.57 billion	5.09	$442.11 million	$7.19	42.20
Transdigm Group	$8.83 billion	8.58	$2.07 billion	$32.08	41.96

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

Summary

Transdigm Group beats Woodward on 12 of the 15 factors compared between the two stocks.

About Woodward

Woodward, Inc. designs, manufactures, and services control solutions for the aerospace and industrial markets worldwide. The company operates in two segments, Aerospace and Industrial. The Aerospace segment provides fuel pumps, metering units, actuators, air valves, specialty valves, fuel nozzles, and thrust reverser actuation systems for turbine engines and nacelles, and flight deck controls, actuators, servocontrols, motors, and sensors for aircraft. These products are used on commercial and private aircraft and rotorcraft, as well as on military fixed-wing aircraft and rotorcraft, guided weapons, and other defense systems. It also provides aftermarket maintenance, repair and overhaul, and other services to commercial airlines, repair facilities, military depots, third party repair shops, and other end users. This segment sells its products to original equipment manufacturers (OEMs), tier-one suppliers, and contractors, as well as through aftermarket sales of components, such as provisioning spares and replacements. The Industrial segment offers actuators, valves, pumps, fuel injection systems, solenoids, ignition systems, speed controls, electronics and software, and sensors. These products are used on industrial gas turbines, steam turbines, compressors, and reciprocating engines. This segment sells its aftermarket products, and other related services to OEMs through an independent network of distributors, as well as directly to end users. The company was founded in 1870 and is headquartered in Fort Collins, Colorado.

About Transdigm Group

TransDigm Group Incorporated designs, produces, and supplies aircraft components in the United States and internationally. The Power & Control segment offers mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, specialized pumps and valves, power conditioning devices, specialized AC/DC electric motors and generators, batteries and chargers, databus and power controls, sensor products, switches and relay panels, hoists, winches and lifting devices, and cargo loading and handling systems. This segment serves engine and power system and subsystem suppliers, airlines, third party maintenance suppliers, military buying agencies, and repair depots. The Airframe segment provides engineered latching and locking devices, engineered rods, engineered connectors and elastomer sealing solutions, cockpit security components and systems, cockpit displays, engineered audio, radio and antenna systems, lavatory components, seat belts and safety restraints, engineered and customized interior surfaces and related components, thermal protection and insulation products, lighting and control technology, and parachutes. This segment serves airframe manufacturers, cabin system and subsystem suppliers, airlines, third party maintenance suppliers, military buying agencies, and repair depots. The Non-aviation segment offers seat belts and safety restraints for ground transportation applications; electro-mechanical actuators for space applications; hydraulic/electromechanical actuators and fuel valves for land-based gas turbines; refueling systems for heavy equipment used in mining, construction, and other industries; and turbine controls for the energy and oil and gas markets. This segment serves off-road vehicle and subsystem suppliers, child restraint system suppliers, and satellite and space system suppliers; and manufacturers of heavy equipment. TransDigm Group Incorporated was founded in 1993 and is based in Cleveland, Ohio.