Contrasting Saab (OTCMKTS:SAABY) & CAE (NYSE:CAE)

CAE (NYSE:CAE) and Saab (OTCMKTS:SAABY) are both large-cap aerospace companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, valuation and dividends.

Institutional and Insider Ownership

67.4% of CAE shares are owned by institutional investors. 18.3% of CAE shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares CAE and Saab”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CAE	$3.28 billion	3.24	$291.29 million	$0.97	34.06
Saab	$6.03 billion	6.61	$394.58 million	$0.62	60.05

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

Volatility and Risk

CAE has a beta of 1.15, suggesting that its stock price is 15% more volatile than the S&P 500. Comparatively, Saab has a beta of -0.19, suggesting that its stock price is 119% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for CAE and Saab, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CAE	1	5	4	2	2.58
Saab	2	1	0	1	2.00

CAE currently has a consensus target price of $34.33, indicating a potential upside of 3.93%. Given CAE’s stronger consensus rating and higher probable upside, equities research analysts clearly believe CAE is more favorable than Saab.

Profitability

This table compares CAE and Saab’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CAE	8.98%	7.60%	3.41%
Saab	7.17%	13.23%	4.94%

Summary

CAE beats Saab on 9 of the 15 factors compared between the two stocks.

About CAE

CAE Inc., together with its subsidiaries, provides simulation training and critical operations support solutions in Canada, the United States, the United Kingdom, Europe, Asia, the Oceania, Africa, and Rest of the Americas. It operates through two segments, Civil Aviation; and Defense and Security. The Civil Aviation segment offers training solutions for flight, cabin, maintenance, and ground personnel in commercial, business, and helicopter aviation; a range of flight simulation training devices; and ab initio pilot training and crew sourcing services, as well as aircraft flight operations solutions. The Defense and Security segment operates as a training and simulation provider that delivers platform-independent solutions to enable and enhance force readiness and security for defense forces, original equipment manufacturers (OEMs), government agencies, and public safety organizations. The company was formerly known as CAE Industries Ltd. and changed its name to CAE Inc. in 1993. CAE Inc. was incorporated in 1947 and is headquartered in Saint-Laurent, Canada.

About Saab

Saab AB (publ) provides products, services, and solutions for military defense, aviation, and civil security markets worldwide. The company operates through Aeronautics, Dynamics, Surveillance, Kockums, and Combitech segments. The company develops military aviation technology, as well as conducts studies on manned and unmanned aircraft. It also provides ground combat weapons, missile systems, torpedoes, unmanned underwater vehicles, training and simulation systems, and signature management systems for armed forces; and niche products for the civil and defense market, such as underwater vehicles for the offshore industry. In addition, the company offers solutions for safety and security, surveillance and decision support, and threat detection, location, and protection, including airborne, ground-based and naval radar, electronic warfare, and combat systems, as well as C4I solutions. Additionally, it provides submarines with the Stirling system for air independent propulsion, surface combatants, mine hunting systems, and autonomous vessels; and systems development, systems integration, information security, systems security, communications, mechanics, and technical product information and logistics. Saab AB (publ) was incorporated in 1937 and is headquartered in Stockholm, Sweden.