Head-To-Head Contrast: StandardAero (NYSE:SARO) and General Dynamics (NYSE:GD)

General Dynamics (NYSE:GD) and StandardAero (NYSE:SARO) are both aerospace companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, earnings, risk, profitability, analyst recommendations, institutional ownership and dividends.

Analyst Ratings

This is a breakdown of recent ratings and target prices for General Dynamics and StandardAero, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
General Dynamics	1	7	13	1	2.64
StandardAero	1	5	4	0	2.30

General Dynamics presently has a consensus price target of $375.47, suggesting a potential upside of 10.12%. StandardAero has a consensus price target of $34.00, suggesting a potential upside of 13.36%. Given StandardAero’s higher probable upside, analysts clearly believe StandardAero is more favorable than General Dynamics.

Earnings and Valuation

This table compares General Dynamics and StandardAero”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
General Dynamics	$52.55 billion	1.75	$4.21 billion	$15.45	22.07
StandardAero	$5.24 billion	1.92	$10.97 million	$0.55	54.53

General Dynamics has higher revenue and earnings than StandardAero. General Dynamics is trading at a lower price-to-earnings ratio than StandardAero, indicating that it is currently the more affordable of the two stocks.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
General Dynamics	8.01%	17.57%	7.38%
StandardAero	3.15%	9.63%	3.69%

Institutional and Insider Ownership

86.1% of General Dynamics shares are owned by institutional investors. 1.5% of General Dynamics shares are owned by company insiders. Comparatively, 1.9% of StandardAero shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Risk and Volatility

General Dynamics has a beta of 0.41, meaning that its stock price is 59% less volatile than the S&P 500. Comparatively, StandardAero has a beta of 1.04, meaning that its stock price is 4% more volatile than the S&P 500.

Summary

General Dynamics beats StandardAero on 10 of the 15 factors compared between the two stocks.

About General Dynamics

General Dynamics Corporation operates as an aerospace and defense company worldwide. It operates through four segments: Aerospace, Marine Systems, Combat Systems, and Technologies. The Aerospace segment produces and sells business jets; and offers aircraft maintenance and repair, management, aircraft-on-ground support and completion, charter, staffing, and fixed-base operator services. The Marine Systems segment designs and builds nuclear-powered submarines, surface combatants, and auxiliary ships for the United States Navy and Jones Act ships for commercial customers, as well as builds crude oil and product tankers, and container and cargo ships; provides maintenance, modernization, and lifecycle support services for navy ships; offers and program management, planning, engineering, and design support services for submarine construction programs. The Combat Systems segment manufactures land combat solutions, such as wheeled and tracked combat vehicles, Stryker wheeled combat vehicles, piranha vehicles, weapons systems, munitions, mobile bridge systems with payloads, tactical vehicles, main battle tanks, armored vehicles, and armaments; and offers modernization programs, engineering, support, and sustainment services. The Technologies segment provides information technology solutions and mission support services; mobile communication, computers, and command-and-control mission systems; intelligence, surveillance, and reconnaissance solutions to military, intelligence, and federal civilian customers; cloud computing, artificial intelligence; machine learning; big data analytics; development, security, and operations; and unmanned undersea vehicle manufacturing and assembly services. The company was founded in 1899 and is headquartered in Reston, Virginia.

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.