Financial Review: Textron (NYSE:TXT) vs. Vertical Aerospace (NYSE:EVTL)

Textron (NYSE:TXT) and Vertical Aerospace (NYSE:EVTL) are both aerospace companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, earnings, analyst recommendations, valuation and dividends.

Institutional and Insider Ownership

86.0% of Textron shares are held by institutional investors. Comparatively, 81.2% of Vertical Aerospace shares are held by institutional investors. 1.9% of Textron shares are held by company insiders. Comparatively, 74.8% of Vertical Aerospace shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings for Textron and Vertical Aerospace, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Textron	0	8	4	1	2.46
Vertical Aerospace	2	0	6	0	2.50

Textron presently has a consensus price target of $98.18, indicating a potential upside of 12.07%. Vertical Aerospace has a consensus price target of $11.10, indicating a potential upside of 407.78%. Given Vertical Aerospace’s stronger consensus rating and higher possible upside, analysts clearly believe Vertical Aerospace is more favorable than Textron.

Earnings and Valuation

This table compares Textron and Vertical Aerospace”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Textron	$14.80 billion	1.03	$921.00 million	$5.11	17.14
Vertical Aerospace	N/A	N/A	$307.16 million	($3.06)	-0.71

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

Profitability

This table compares Textron and Vertical Aerospace’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Textron	6.22%	14.63%	6.33%
Vertical Aerospace	N/A	-197.90%	206.09%

Risk & Volatility

Textron has a beta of 0.97, meaning that its stock price is 3% less volatile than the S&P 500. Comparatively, Vertical Aerospace has a beta of 1.46, meaning that its stock price is 46% more volatile than the S&P 500.

Summary

Textron beats Vertical Aerospace on 8 of the 14 factors compared between the two stocks.

About Textron

Textron Inc. operates in the aircraft, defense, industrial, and finance businesses worldwide. It operates through six segments: Textron Aviation, Bell, Textron Systems, Industrial, Textron eAviation, and Finance. The Textron Aviation segment manufactures, sells, and services business jets, turboprop and piston engine aircraft, and military trainer and defense aircraft; and offers maintenance, inspection, and repair services, as well as sells commercial parts. The Bell segment supplies military and commercial helicopters, tiltrotor aircrafts, and related spare parts and services. The Textron Systems segment offers unmanned aircraft systems, electronic systems and solutions, advanced marine crafts, piston aircraft engines, live military air-to-air and air-to-ship training, weapons and related components, and armored and specialty vehicles. The Industrial segment offers blow-molded solutions, including conventional plastic fuel tanks and pressurized fuel tanks for hybrid vehicle applications, clear-vision systems, plastic tanks for catalytic reduction systems, and battery housing systems for use in electric vehicles primarily to automobile original equipment manufacturers (OEMs); and golf cars, off-road utility vehicles, powersports products, light transportation vehicles, aviation ground support equipment, professional turf-maintenance equipment, and turf-care vehicles to golf courses and resorts, government agencies and municipalities, consumers, outdoor enthusiasts, and commercial and industrial users. The Textron eAviation segment manufactures and sells light aircraft and gliders with electric and combustion engines; and provides other research and development initiatives related to sustainable aviation solutions. The Finance segment offers financing services to purchase new and pre-owned aviation aircraft and Bell helicopters. Textron Inc. was founded in 1923 and is headquartered in Providence, Rhode Island.

About Vertical Aerospace

Vertical Aerospace Ltd., an aerospace and technology company, engages in designing, manufacturing, and selling zero operating emission electric vertical takeoff and landing (eVTOL) aircraft for use in the advanced air mobility in the United Kingdom. It offers VX4, an eVTOL aircraft. Vertical Aerospace Ltd. was founded in 2016 and is headquartered in Bristol, the United Kingdom.