Analyzing Hexcel (NYSE:HXL) and Moog (NYSE:MOG.B)

Moog (NYSE:MOG.B) and Hexcel (NYSE:HXL) are both aerospace companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, profitability, institutional ownership, valuation, dividends, analyst recommendations and risk.

Dividends

Moog pays an annual dividend of $1.16 per share and has a dividend yield of 0.4%. Hexcel pays an annual dividend of $0.72 per share and has a dividend yield of 0.8%. Moog pays out 17.6% of its earnings in the form of a dividend. Hexcel pays out 52.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Hexcel has increased its dividend for 3 consecutive years. Hexcel is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

8.1% of Moog shares are owned by institutional investors. Comparatively, 95.5% of Hexcel shares are owned by institutional investors. 2.4% of Moog shares are owned by company insiders. Comparatively, 2.0% of Hexcel shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Moog and Hexcel’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Moog	6.38%	15.47%	6.85%
Hexcel	5.78%	9.54%	5.08%

Earnings and Valuation

This table compares Moog and Hexcel”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Moog	$3.86 billion	2.68	$235.03 million	$6.59	49.51
Hexcel	$1.89 billion	3.58	$109.40 million	$1.38	64.81

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

Analyst Recommendations

This is a breakdown of recent ratings for Moog and Hexcel, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Moog	0	0	0	0	0.00
Hexcel	1	11	3	0	2.13

Hexcel has a consensus target price of $82.17, indicating a potential downside of 8.13%. Given Hexcel’s stronger consensus rating and higher probable upside, analysts plainly believe Hexcel is more favorable than Moog.

Volatility and Risk

Moog has a beta of 0.69, suggesting that its stock price is 31% less volatile than the S&P 500. Comparatively, Hexcel has a beta of 1.06, suggesting that its stock price is 6% more volatile than the S&P 500.

Summary

Hexcel beats Moog on 9 of the 17 factors compared between the two stocks.

About Moog

Moog Inc. designs, manufactures, and integrates precision motion and fluid controls and systems for original equipment manufacturers and end users in the aerospace, defense, and industrial markets worldwide. The company's Aircrafts Controls segment offers primary and secondary flight controls for military and commercial aircrafts; aftermarket support services; and ground-based navigation aids. Its Space and Defense Controls segment provides controls for satellites, space vehicles, launch vehicles, armored combat vehicles, tactical and strategic missiles, security and surveillance, and other defense applications; and gun aiming, stabilization, and automatic ammunition loading for armored combat vehicles. This segment also offers steering tactical and strategic missiles; and designs, builds, and integrates weapon stores management systems for light attack aerial reconnaissance, ground, and sea platforms. The company's Industrial Systems segment provides systems for applications in injection and blow molding machinery, metal forming presses, and heavy industry customers in steel and aluminum production; and supplies solutions for power generation applications, electromechanical motion simulation bases, medical training simulators, and custom test systems and controls. This segment also offers systems and components for applications in oil and gas exploration and production; components for wind turbine applications; and components and systems for diagnostic imaging CT scan medical equipment, sleep apnea equipment, oxygen concentrators, infusion therapy, and enteral clinical nutrition. The company was founded in 1951 and is headquartered in East Aurora, New York.

About Hexcel

Hexcel Corporation develops, manufactures, and markets carbon fibers, structural reinforcements, honeycomb structures, resins, and composite materials and parts for use in commercial aerospace, space and defense, and industrial applications. It operates through two segments, Composite Materials and Engineered Products. The Composite Materials segment manufactures and markets fabrics, multi-axials, specialty reinforcements, prepregs and other fiber-reinforced matrix materials, structural adhesives, molding compounds, tooling materials, polyurethane systems, and laminates that are used in military and commercial aircraft, wind turbine blades, recreational products, and other industrial applications, as well as in automotive, marine, and rail transportation. The Engineered Products segment manufactures and markets aircraft structures and finished aircraft components, including wing to body fairings, wing panels, flight deck panels, door liners, rotorcraft blades, spars, and tip caps; and aircraft structural sub-components and semi-finished components used in rotorcraft blades, engine nacelles, and aircraft surfaces, such as flaps, wings, elevators, and fairings; and RF interference control products for military and aerospace applications. This segment also provides interference control materials, structural composites, and services; dielectric absorber foams; magnetic absorbers; and thermoplastics for commercial and defense applications. The company sells its products directly through its managers, product managers, and sales personnel, as well as through independent distributors in the Americas, Europe, the Asia Pacific, India, and Africa. Hexcel Corporation was founded in 1946 and is headquartered in Stamford, Connecticut.