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

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

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Loar	$402.82 million	16.91	$22.23 million	$0.66	110.27
Woodward	$3.57 billion	5.50	$442.11 million	$7.19	45.48

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 Loar and Woodward’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Loar	13.33%	6.45%	4.85%
Woodward	12.39%	17.68%	9.35%

Insider & Institutional Ownership

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

Volatility and Risk

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

Analyst Recommendations

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

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

Loar currently has a consensus price target of $91.75, suggesting a potential upside of 26.07%. Woodward has a consensus price target of $323.89, suggesting a potential downside of 0.96%. Given Loar’s stronger consensus rating and higher possible upside, research analysts plainly believe Loar is more favorable than Woodward.

Summary

Woodward beats Loar on 8 of the 14 factors compared between the two stocks.

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.

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.