Orbital ATK (NYSE: OA) and Hexcel (NYSE:HXL) are both mid-cap aerospace companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitability, analyst recommendations, institutional ownership and risk.
Volatility and Risk
Orbital ATK has a beta of -0.31, indicating that its share price is 131% less volatile than the S&P 500. Comparatively, Hexcel has a beta of 1.04, indicating that its share price is 4% more volatile than the S&P 500.
Institutional & Insider Ownership
86.9% of Orbital ATK shares are held by institutional investors. 1.2% of Orbital ATK shares are held by insiders. Comparatively, 2.1% of Hexcel shares are held 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.
Valuation & Earnings
This table compares Orbital ATK and Hexcel’s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Orbital ATK | $4.51 billion | 1.37 | $607.00 million | N/A | N/A |
| Hexcel | $1.95 billion | 2.43 | $442.00 million | $2.73 | 19.30 |
Orbital ATK has higher revenue and earnings than Hexcel.
Dividends
Orbital ATK pays an annual dividend of $1.28 per share and has a dividend yield of 1.2%. Hexcel pays an annual dividend of $0.50 per share and has a dividend yield of 0.9%. Hexcel pays out 18.3% of its earnings in the form of a dividend.
Profitability
This table compares Orbital ATK and Hexcel’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Orbital ATK | 6.11% | 15.62% | 5.38% |
| Hexcel | 12.38% | 19.06% | 9.37% |
Analyst Ratings
This is a breakdown of current ratings for Orbital ATK and Hexcel, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Orbital ATK | 0 | 1 | 8 | 0 | 2.89 |
| Hexcel | 0 | 5 | 5 | 0 | 2.50 |
Orbital ATK presently has a consensus price target of $107.75, suggesting a potential upside of 0.52%. Hexcel has a consensus price target of $56.75, suggesting a potential upside of 7.71%. Given Hexcel’s higher probable upside, analysts clearly believe Hexcel is more favorable than Orbital ATK.
Summary
Hexcel beats Orbital ATK on 8 of the 15 factors compared between the two stocks.
Orbital ATK Company Profile
Orbital ATK, Inc. is an aerospace and defense systems company and supplier of related products to the United States Government, allied nations, prime contractors and other customers. The Company’s segments include Flight Systems Group, Defense Systems Group, Space Systems Group and Corporate. Its products include launch vehicles and related propulsion systems; satellites and associated components and services; tactical missiles, subsystems and defense electronics, and precision weapons, armament systems and ammunition. The Flight Systems Group segment consists of Launch Vehicles Division, Propulsion Systems Division and Aerospace Structures Division. The Defense Systems Group segment consists of Armament Systems Division, Defense Electronic Division, Missile Products Division and Small Caliber Systems Division. The Space Systems Group consists of Commercial Satellites Division, Government Satellites Division, Space Components Division and Technical Services Division.
Hexcel Company Profile
Hexcel Corporation is a composites company. The Company develops, manufactures, and markets lightweight, structural materials, including carbon fibers, specialty reinforcements, prepregs and other fiber-reinforced matrix materials, honeycomb, adhesives, engineered honeycomb and structures, for use in Commercial Aerospace, Space and Defense and Industrial markets. It operates in two segments: Composite Materials and Engineered Products. The Composite Materials segment consists of its carbon fiber, specialty reinforcements, resins, prepregs and other fiber-reinforced matrix materials, and honeycomb core product lines. The Engineered Products segment consists of lightweight structures, molded components, engineered core and honeycomb products with added functionality. Its products are used in a range of end applications, such as commercial and military aircraft, space launch vehicles and satellites, wind turbine blades, automotive, and recreational products.
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