Analyzing Loar (NYSE:LOAR) and Woodward (NASDAQ:WWD)

Woodward (NASDAQ:WWD) and Loar (NYSE:LOAR) are both aerospace companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, dividends, institutional ownership, analyst recommendations, profitability and earnings.

Valuation and Earnings

This table compares Woodward and Loar”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	5.54	$442.11 million	$7.19	45.82
Loar	$402.82 million	16.45	$22.23 million	$0.66	107.27

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

Profitability

This table compares Woodward and Loar’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%
Loar	13.33%	6.45%	4.85%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Woodward and Loar, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Woodward	0	3	9	1	2.85
Loar	0	1	4	1	3.00

Woodward currently has a consensus price target of $323.89, suggesting a potential downside of 1.68%. Loar has a consensus price target of $91.75, suggesting a potential upside of 29.59%. Given Loar’s stronger consensus rating and higher probable upside, analysts plainly believe Loar is more favorable than Woodward.

Institutional and Insider Ownership

81.2% of Woodward shares are owned by institutional investors. 0.7% of Woodward shares are owned by company insiders. Comparatively, 22.6% of Loar shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk and Volatility

Woodward has a beta of 1.02, meaning that its share price is 2% more volatile than the S&P 500. Comparatively, Loar has a beta of 0.37, meaning that its share price is 63% less volatile than the S&P 500.

Summary

Woodward beats Loar on 8 of the 14 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 Loar

Loar Holdings Inc., through its subsidiaries, designs, manufactures, and markets aerospace and defense components for aircraft, and aerospace and defense systems in the United States and internationally. It offers products in various categories, which include airframe components, structural components, avionics, composites, braking system components, de-ice and ice protection, electro-mechanical, engineered materials, flight controls, fluid and motion controls, environmental, metal forming, molded components, and restraints and safety devices. The company also provides auto throttles, lap-belt airbags, two-and three-point seat belts, water purification systems, fire barriers, polyimide washers and bushings, latches, hold-open and tie rods, temperature and fluid sensors and switches, carbon and metallic brake discs, fluid and pneumatic-based ice protection, RAM air components, sealing solutions, actuation devices, and others. It primarily serves commercial, business jet and general aviation, and defense markets. Loar Holdings Inc. was founded in 2017 and is headquartered in White Plains, New York.