Critical Review: StandardAero (NYSE:SARO) versus Safran (OTCMKTS:SAFRY)

Safran (OTCMKTS:SAFRY) and StandardAero (NYSE:SARO) are both aerospace companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, valuation, dividends, profitability, institutional ownership, earnings and analyst recommendations.

Profitability

This table compares Safran and StandardAero’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Safran	N/A	N/A	N/A
StandardAero	3.15%	9.63%	3.69%

Volatility and Risk

Safran has a beta of 1.09, suggesting that its stock price is 9% more volatile than the S&P 500. Comparatively, StandardAero has a beta of 1.04, suggesting that its stock price is 4% more volatile than the S&P 500.

Insider & Institutional Ownership

0.1% of Safran shares are held by institutional investors. 1.9% of StandardAero shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Safran and StandardAero”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Safran	$30.47 billion	4.94	-$721.76 million	N/A	N/A
StandardAero	$5.87 billion	1.69	$10.97 million	$0.55	53.87

StandardAero has lower revenue, but higher earnings than Safran.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Safran	0	3	4	2	2.89
StandardAero	0	6	3	0	2.33

StandardAero has a consensus price target of $32.43, suggesting a potential upside of 9.45%. Given StandardAero’s higher possible upside, analysts clearly believe StandardAero is more favorable than Safran.

Summary

Safran beats StandardAero on 7 of the 13 factors compared between the two stocks.

About Safran

Safran SA, together with its subsidiaries, engages in the aerospace and defense businesses worldwide. The company operates through three segments: Aerospace Propulsion; Aircraft Equipment, Defense and Aerosystems; and Aircraft Interiors. The Aerospace Propulsion segment designs, develops, produces, and markets propulsion and mechanical power transmission systems for commercial aircraft, military transport, training and combat aircraft, civil and military helicopters, satellites, and drones; and offers maintenance, repair, and overhaul (MRO) services, as well as sells spare parts. The Aircraft Equipment, Defense and Aerosystems segment provides landing gears and brakes; nacelles and reversers; avionics, such as flight controls and onboard information systems; security systems, including evacuation slides and oxygen masks; onboard computers and fuel systems; electrical power management systems and related engineering services; and optronic equipment and sights, navigation equipment and sensors, infantry, and drones, as well as offers MRO services and sells spare parts. The Aircraft Interiors segment designs, develops, manufactures, and markets aircraft seats for passengers and crew; cabin equipment, overhead bins, class dividers, passenger service units, cabin interior solutions, chilling systems, galleys, electrical inserts, and trolleys and cargo equipment; and cabin and passenger solutions, such as water distribution equipment, lavatories, air systems, and in-flight entertainment and connectivity systems. Its products and services are used in civil and military aircraft, and helicopters. Safran SA was founded in 1896 and is based in Paris, France.

About StandardAero

StandardAero, Inc. provides aerospace engine aftermarket services for fixed and rotary wing aircraft in the United States, Canada, the United Kingdom, Rest of Europe, Asia, and internationally. It operates in two segments, Engine Services and Component Repair Services. The Engine Services segment provides a suite of aftermarket services, including maintenance, repair and overhaul, on-wing and field service support, asset management, and engineering and related solutions to customers in the commercial aerospace, military and helicopter, and business aviation end markets. The Component Repair Services segment offers engine component and accessory repairs to the commercial aerospace, military and helicopter, land and marine, and oil and gas end markets. The company was founded in 1911 and is headquartered in Scottsdale, Arizona.