Critical Review: Park Aerospace (NYSE:PKE) versus Woodward (NASDAQ:WWD)

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

Risk and Volatility

Park Aerospace has a beta of 0.45, indicating that its stock price is 55% less volatile than the S&P 500. Comparatively, Woodward has a beta of 1.27, indicating that its stock price is 27% more volatile than the S&P 500.

Valuation and Earnings

This table compares Park Aerospace and Woodward”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Park Aerospace	$63.46 million	5.85	$5.88 million	$0.34	55.03
Woodward	$3.32 billion	4.45	$372.97 million	$6.32	39.05

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

Institutional and Insider Ownership

77.8% of Park Aerospace shares are held by institutional investors. Comparatively, 81.2% of Woodward shares are held by institutional investors. 11.3% of Park Aerospace shares are held by company insiders. Comparatively, 0.8% of Woodward shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and target prices for Park Aerospace and Woodward, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Park Aerospace	0	0	0	0	0.00
Woodward	0	5	6	0	2.55

Woodward has a consensus price target of $253.11, indicating a potential upside of 2.55%. Given Woodward’s stronger consensus rating and higher possible upside, analysts plainly believe Woodward is more favorable than Park Aerospace.

Dividends

Park Aerospace pays an annual dividend of $0.50 per share and has a dividend yield of 2.7%. Woodward pays an annual dividend of $1.12 per share and has a dividend yield of 0.5%. Park Aerospace pays out 147.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Woodward pays out 17.7% of its earnings in the form of a dividend. Woodward has increased its dividend for 5 consecutive years.

Profitability

This table compares Park Aerospace and Woodward’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Park Aerospace	10.98%	7.60%	6.64%
Woodward	11.32%	16.57%	8.53%

Summary

Woodward beats Park Aerospace on 13 of the 17 factors compared between the two stocks.

About Park Aerospace

Park Aerospace Corp., an aerospace company, develops and manufactures solution and hot-melt advanced composite materials used to produce composite structures for the aerospace market in North America, Asia, and Europe. It offers advanced composite materials, including film adhesives and lightning strike protection materials that are used to produce primary and secondary structures for jet engines, large and regional transport aircrafts, military aircrafts, unmanned aerial vehicles, business jets, general aviation aircrafts, and rotary wing aircrafts. The company also provides specialty ablative materials for rocket motors and nozzles; and specially designed materials for radome applications. In addition, it designs and fabricates composite parts, structures and assemblies, and low volume tooling for the aerospace industry. The company was formerly known as Park Electrochemical Corp. and changed its name to Park Aerospace Corp. in July 2019. Park Aerospace Corp. was incorporated in 1954 and is based in Westbury, New York.

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.