Head-To-Head Contrast: Optex Systems (NASDAQ:OPXS) vs. AAR (NYSE:AIR)

Optex Systems (NASDAQ:OPXS) and AAR (NYSE:AIR) are both aerospace companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, analyst recommendations, risk, institutional ownership, valuation, dividends and profitability.

Risk & Volatility

Optex Systems has a beta of 0.39, meaning that its stock price is 61% less volatile than the S&P 500. Comparatively, AAR has a beta of 1.5, meaning that its stock price is 50% more volatile than the S&P 500.

Earnings & Valuation

This table compares Optex Systems and AAR”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Optex Systems	$33.99 million	2.35	$3.77 million	$0.75	15.43
AAR	$2.78 billion	0.98	$12.50 million	$0.33	228.57

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

Analyst Ratings

This is a breakdown of recent recommendations for Optex Systems and AAR, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Optex Systems	0	0	0	0	0.00
AAR	0	0	4	0	3.00

AAR has a consensus target price of $83.75, indicating a potential upside of 11.03%. Given AAR’s stronger consensus rating and higher probable upside, analysts clearly believe AAR is more favorable than Optex Systems.

Insider and Institutional Ownership

19.1% of Optex Systems shares are owned by institutional investors. Comparatively, 90.7% of AAR shares are owned by institutional investors. 30.3% of Optex Systems shares are owned by company insiders. Comparatively, 3.6% of AAR shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Optex Systems and AAR’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Optex Systems	13.01%	24.67%	19.20%
AAR	0.45%	11.66%	4.92%

Summary

AAR beats Optex Systems on 8 of the 14 factors compared between the two stocks.

About Optex Systems

Optex Systems Holdings, Inc manufactures and sells optical sighting systems and assemblies primarily for the U.S. department of defense, foreign military applications, and commercial markets in the United States. It offers periscopes, such as laser and non-laser protected plastic and glass periscopes, electronic M17 day/thermal periscopes, and vision blocks; sighting systems, including back up sights, digital day and night sighting systems, M36 thermal periscope, unity mirrors, optical weapon system support and maintenance, commander weapon station sights, and sight assembly refurbishments; howitzers comprising M137 telescope, M187 mount, M119 aiming device, XM10 and aiming circles; and applied optics center consisting of laser interference filter, optical assemblies, laser filter units, day windows, and specialty thin film coatings, as well as other products, such as muzzle reference systems, binoculars, collimators, optical lenses and elements, and windows. The company also provides various periscope configurations, rifle and surveillance sights, and night vision optical assemblies. Its products are installed on various types of U.S. military land vehicles, such as the Abrams, Bradley, and Stryker families of fighting vehicles, as well as light armored and armored security vehicles. The company offers its products directly to the federal government, prime contractors, and foreign governments. Optex Systems Holdings, Inc was founded in 1987 and is headquartered in Richardson, Texas. Optex Systems Holdings, Inc is a subsidiary of Sileas Corporation.

About AAR

AAR Corp. provides products and services to commercial aviation, government, and defense markets worldwide. The Parts Supply segment leases and sells aircraft components and replacement parts. The Repair & Engineering segment provides airframe maintenance services, such as airframe inspection, painting, line maintenance, airframe modification, structural repair, avionics service and installation, exterior and interior refurbishment, and engineering and support services; component repair services comprising maintenance, repair, and overhaul (MRO) services, engine and airframe accessories, and interior refurbishment; and landing gear overhaul services, including repair services on wheels and brakes. This segment also develops specific aircraft components and parts; and designs proprietary designated engineering representative repairs. The Integrated Solutions segment engages in the fleet management and operation of customer-owned aircraft; provision of supply chain logistics services, such as material planning, sourcing, logistics, information and program management, and parts and component repair and overhaul services; and flight hour component inventory and repair services. In addition, the segment provides integrated software solutions comprising Trax, a cloud-based electronic enterprise resource platform, as well as a suite of paperless mobility apps for automating MRO workflows. The Expeditionary Services segment designs, manufactures, and repairs transportation pallets; and containers and shelters for military and humanitarian tactical deployment activities, including armories, supply and parts storage, refrigeration systems, tactical operation centers, briefing rooms, laundry and kitchen facilities, water treatment, and sleeping quarters, as well as engages in provision of engineering, design, and system integration services for specialized command and control systems. AAR Corp. was founded in 1951 and is headquartered in Wood Dale, Illinois.