Innovative Solutions and Support (NASDAQ:ISSC – Get Free Report) and Saab (OTCMKTS:SAABY – Get Free Report) are both aerospace companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, valuation, dividends, analyst recommendations, institutional ownership and profitability.
Risk and Volatility
Innovative Solutions and Support has a beta of 0.64, suggesting that its stock price is 36% less volatile than the S&P 500. Comparatively, Saab has a beta of -0.19, suggesting that its stock price is 119% less volatile than the S&P 500.
Profitability
This table compares Innovative Solutions and Support and Saab’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Innovative Solutions and Support | 18.54% | 26.52% | 16.12% |
| Saab | 7.99% | 16.16% | 6.11% |
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Innovative Solutions and Support | $84.30 million | 4.20 | $15.63 million | $0.87 | 22.86 |
| Saab | $8.42 billion | 4.75 | $671.35 million | $0.74 | 50.45 |
Saab has higher revenue and earnings than Innovative Solutions and Support. Innovative Solutions and Support is trading at a lower price-to-earnings ratio than Saab, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a breakdown of current ratings and recommmendations for Innovative Solutions and Support and Saab, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Innovative Solutions and Support | 0 | 1 | 1 | 4 | 3.50 |
| Saab | 2 | 1 | 0 | 1 | 2.00 |
Innovative Solutions and Support currently has a consensus price target of $16.25, suggesting a potential downside of 18.30%. Given Innovative Solutions and Support’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Innovative Solutions and Support is more favorable than Saab.
Insider and Institutional Ownership
28.5% of Innovative Solutions and Support shares are owned by institutional investors. 4.4% of Innovative Solutions and Support shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Summary
Innovative Solutions and Support beats Saab on 11 of the 15 factors compared between the two stocks.
About Innovative Solutions and Support
Innovative Solutions and Support, Inc., a systems integrator, designs, develops, manufactures, sells, and services flight guidance, autothrottles, and cockpit display systems in the United States and internationally. It offers flat panel display systems that replicate the display of analog or digital displays on one screen and replace existing displays in legacy aircraft, as well as used for security monitoring on-board aircraft and as tactical workstations on military aircraft; and flight deck management system, a navigation and performance computer that upgrade for commercial air transport aircraft. The company also provides integrated standby units, which incorporate the measurement and display of attitude, altitude, airspeed, and navigation data into a single backup navigation instrument for military, commercial air transport, and corporate/general aviation applications. In addition, it offers digital air data computers that calculate various air data parameters, such as altitude, airspeed, vertical speed, angle of attack, and other information; integrated air data computers and display units, which calculate and convey air data information; altitude displays that convey aircraft altitude measurements; airspeed displays that convey various airspeed measurements; and altitude alerters. Further, the company offers the engine and fuel displays that convey information related to fuel and oil levels, and engine activity, including oil and hydraulic pressure and temperature; integrated global navigation systems; ThrustSense, a full regime autothrottle; and utility management systems. It serves commercial air transport carriers and corporate/general aviation companies, the Department of Defense and its commercial contractors, aircraft operators, aircraft modification centers, government agencies, and foreign militaries, as well as original equipment manufacturers. Innovative Solutions and Support, Inc. was incorporated in 1988 and is based in Exton, Pennsylvania.
About Saab
Saab AB (publ) provides products, services, and solutions for military defense, aviation, and civil security markets worldwide. The company operates through Aeronautics, Dynamics, Surveillance, Kockums, and Combitech segments. The company develops military aviation technology, as well as conducts studies on manned and unmanned aircraft. It also provides ground combat weapons, missile systems, torpedoes, unmanned underwater vehicles, training and simulation systems, and signature management systems for armed forces; and niche products for the civil and defense market, such as underwater vehicles for the offshore industry. In addition, the company offers solutions for safety and security, surveillance and decision support, and threat detection, location, and protection, including airborne, ground-based and naval radar, electronic warfare, and combat systems, as well as C4I solutions. Additionally, it provides submarines with the Stirling system for air independent propulsion, surface combatants, mine hunting systems, and autonomous vessels; and systems development, systems integration, information security, systems security, communications, mechanics, and technical product information and logistics. Saab AB (publ) was incorporated in 1937 and is headquartered in Stockholm, Sweden.
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