Wabtec (NYSE:WAB – Get Free Report) and Air Lease (NYSE:AL – Get Free Report) are both transportation companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, risk, valuation, profitability, analyst recommendations, institutional ownership and dividends.
Dividends
Wabtec pays an annual dividend of $1.00 per share and has a dividend yield of 0.5%. Air Lease pays an annual dividend of $0.88 per share and has a dividend yield of 1.4%. Wabtec pays out 14.9% of its earnings in the form of a dividend. Air Lease pays out 10.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Wabtec has increased its dividend for 4 consecutive years and Air Lease has increased its dividend for 13 consecutive years. Air Lease is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Analyst Recommendations
This is a breakdown of current ratings and target prices for Wabtec and Air Lease, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Wabtec | 0 | 2 | 5 | 0 | 2.71 |
| Air Lease | 1 | 3 | 4 | 0 | 2.38 |
Institutional and Insider Ownership
91.7% of Wabtec shares are held by institutional investors. Comparatively, 94.6% of Air Lease shares are held by institutional investors. 1.1% of Wabtec shares are held by company insiders. Comparatively, 6.6% of Air Lease shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Risk and Volatility
Wabtec has a beta of 1.11, suggesting that its stock price is 11% more volatile than the S&P 500. Comparatively, Air Lease has a beta of 1.37, suggesting that its stock price is 37% more volatile than the S&P 500.
Valuation & Earnings
This table compares Wabtec and Air Lease”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Wabtec | $10.56 billion | 3.06 | $1.06 billion | $6.70 | 28.19 |
| Air Lease | $2.73 billion | 2.60 | $427.70 million | $8.24 | 7.71 |
Wabtec has higher revenue and earnings than Air Lease. Air Lease is trading at a lower price-to-earnings ratio than Wabtec, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Wabtec and Air Lease’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Wabtec | 10.92% | 13.65% | 7.41% |
| Air Lease | 34.04% | 7.99% | 1.92% |
Summary
Wabtec beats Air Lease on 9 of the 17 factors compared between the two stocks.
About Wabtec
Westinghouse Air Brake Technologies Corporation, together with its subsidiaries, provides technology-based locomotives, equipment, systems, and services for the freight rail and passenger transit industries worldwide. It offers diesel-electric, battery, and liquid natural gas-powered locomotives; engines, electric motors, and propulsion systems; and marine and mining products. The company also offers positive train control equipment; pneumatic braking products; railway electronics; signal design and engineering services; distributed locomotive power, train cruise controls, and train remote controls; industrial/mobile Internet of Things hardware and software, edge-to-cloud, on and off-board analytics and rules, and asset performance management solutions; rail and shipper transportation management, and port visibility and optimization solutions; and network optimization solutions. In addition, it provides freight car trucks, braking equipment, and related components; air compressors and dryers; heat transfer components and systems; track and switch products; new commuter and switcher locomotives; and turbochargers. Further, the company offers freight locomotive overhauls, modernizations, and refurbishment services; locomotive and car maintenance; transit locomotive and car overhaul; unit exchange of locomotive components; and maintenance of way equipment and services. Additionally, it provides railway and freight braking equipment and related components; friction products, such as brake shoes, discs, and pads; heating, ventilation, and air conditioning equipment; access and platform screen doors; pantographs; auxiliary power converter and battery chargers; passenger information systems and closed-circuit television; signaling and railway electric relays; and doors, window assemblies, accessibility lifts, ramps, and electric charging solutions for buses. The company was founded in 1869 and is headquartered in Pittsburgh, Pennsylvania.
About Air Lease
Air Lease Corporation, an aircraft leasing company, engages in the purchase and leasing of commercial jet aircraft to airlines worldwide. It sells aircraft from its fleet to third parties, including other leasing companies, financial services companies, airlines, and other investors. The company provides fleet management services to investors and owners of aircraft portfolios. As of December 31, 2023, it owned a fleet of 463 aircraft, including 345 narrowbody aircraft and 118 widebody aircraft. Air Lease Corporation was incorporated in 2010 and is headquartered in Los Angeles, California.
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