Critical Review: Core & Main (NYSE:CNM) and Willis Lease Finance (NASDAQ:WLFC)

Core & Main (NYSE:CNM) and Willis Lease Finance (NASDAQ:WLFC) are both industrials companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, institutional ownership, dividends, earnings, analyst recommendations and profitability.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Core & Main and Willis Lease Finance, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Core & Main	1	5	8	0	2.50
Willis Lease Finance	0	2	1	1	2.75

Core & Main presently has a consensus price target of $54.27, suggesting a potential upside of 11.51%. Willis Lease Finance has a consensus price target of $75.50, suggesting a potential upside of 58.45%. Given Willis Lease Finance’s stronger consensus rating and higher probable upside, analysts plainly believe Willis Lease Finance is more favorable than Core & Main.

Profitability

This table compares Core & Main and Willis Lease Finance’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Core & Main	5.96%	25.98%	8.53%
Willis Lease Finance	9.38%	12.08%	2.25%

Volatility & Risk

Core & Main has a beta of 0.91, indicating that its share price is 9% less volatile than the S&P 500. Comparatively, Willis Lease Finance has a beta of 0.76, indicating that its share price is 24% less volatile than the S&P 500.

Valuation & Earnings

This table compares Core & Main and Willis Lease Finance”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Core & Main	$7.65 billion	1.21	$441.00 million	$2.43	20.03
Willis Lease Finance	$730.24 million	1.38	$113.76 million	$3.99	11.94

Core & Main has higher revenue and earnings than Willis Lease Finance. Willis Lease Finance is trading at a lower price-to-earnings ratio than Core & Main, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

94.2% of Core & Main shares are held by institutional investors. Comparatively, 93.7% of Willis Lease Finance shares are held by institutional investors. 1.5% of Core & Main shares are held by company insiders. Comparatively, 53.3% of Willis Lease Finance shares are held by company 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.

Summary

Core & Main beats Willis Lease Finance on 8 of the 15 factors compared between the two stocks.

About Core & Main

Core & Main, Inc. is a specialty distributor focused on water, wastewater, storm drainage and fire protection products, and related services. The company provides infrastructure solutions to municipalities, private water companies and professional contractors across municipal, non-residential, and residential end markets, nationwide. The company was founded in 1874 and is headquartered in St. Louis, MO.

About Willis Lease Finance

Willis Lease Finance Corporation operates as a lessor and servicer of commercial aircraft and aircraft engines worldwide. The company operates through two segments, Leasing and Related Operations, and Spare Parts Sales. The Leasing and Related Operations segment engages in acquiring and leasing commercial aircraft, aircraft engines, and other aircraft equipment, as well as the purchase and resale of commercial aircraft engines and other aircraft equipment, and other related businesses. The Spare Parts Sales segment purchases and resells after-market engine parts, whole engines, engine modules, and portable aircraft components. The company also focuses on engine management and consulting business. It serves commercial aircraft operators, as well as maintenance, repair, and overhaul organizations. As of December 31, 2023, it had a total lease portfolio of 337 engines, 12 aircraft, one marine vessel, and other leased parts and equipment, and with 74 lessees in 42 countries; and managed a total lease portfolio of 198 engines, aircraft, and related equipment for other parties. The company was founded in 1985 and is headquartered in Coconut Creek, Florida.