Contrasting AAR (NYSE:AIR) & Ducommun (NYSE:DCO)

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

Valuation & Earnings

This table compares AAR and Ducommun”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AAR	$2.78 billion	1.17	$12.50 million	$0.78	106.45
Ducommun	$795.08 million	1.81	$31.50 million	$2.63	36.62

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

Volatility and Risk

AAR has a beta of 1.52, meaning that its stock price is 52% more volatile than the S&P 500. Comparatively, Ducommun has a beta of 1.38, meaning that its stock price is 38% more volatile than the S&P 500.

Institutional and Insider Ownership

90.7% of AAR shares are owned by institutional investors. Comparatively, 92.2% of Ducommun shares are owned by institutional investors. 3.6% of AAR shares are owned by insiders. Comparatively, 8.9% of Ducommun shares are owned by 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 Recommendations

This is a summary of recent recommendations and price targets for AAR and Ducommun, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AAR	0	1	3	1	3.00
Ducommun	0	1	6	0	2.86

AAR presently has a consensus price target of $89.33, indicating a potential upside of 7.59%. Ducommun has a consensus price target of $97.50, indicating a potential upside of 1.24%. Given AAR’s stronger consensus rating and higher probable upside, equities analysts plainly believe AAR is more favorable than Ducommun.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
AAR	1.01%	12.29%	5.16%
Ducommun	5.03%	7.61%	4.62%

Summary

AAR beats Ducommun on 8 of the 15 factors compared between the two stocks.

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.

About Ducommun

Ducommun Incorporated provides engineering and manufacturing services for products and applications used primarily in the aerospace and defense, industrial, medical, and other industries in the United States. The company operates through two segments, Electronic Systems and Structural Systems. The Electronic Systems segment provides cable assemblies and interconnect systems; printed circuit board assemblies; electronic, electromechanical, and mechanical components and assemblies, as well as lightning diversion systems; and radar enclosures, aircraft avionics racks, shipboard communications and control enclosures, printed circuit board assemblies, cable assemblies, wire harnesses, interconnect systems, lightning diversion strips, surge suppressors, conformal shields, and other assemblies. The segment also supplies engineered products, including illuminated pushbutton switches and panels for aviation and test systems; microwave and millimeter switches and filters for radio frequency systems and test instrumentation; and motors and resolvers for motion control. In addition, this segment provides engineering expertise for aerospace system design, development, integration, and testing. The Structural Systems segment designs, engineers, and manufactures contoured aluminum, titanium, and Inconel aero structure components; structural assembly products, such as winglets, engine components, and fuselage structural panels; aerodynamic systems; and metal and composite bonded structures and assemblies comprising aircraft wing spoilers, large fuselage skins, rotor blades on rotary-wing aircraft and components, flight control surfaces, engine components, ammunition handling systems, and magnetic seals. It serves commercial aircraft, military fixed-wing aircraft, military and commercial rotary-wing aircraft, and space programs, as well as industrial, medical, and other end-use markets. The company was founded in 1849 and is headquartered in Santa Ana, California.