Critical Review: COBHAM PLC/ADR (OTCMKTS:CBHMY) and AeroVironment (NASDAQ:AVAV)

COBHAM PLC/ADR (OTCMKTS:CBHMY) and AeroVironment (NASDAQ:AVAV) are both mid-cap industrials 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.

Risk & Volatility

COBHAM PLC/ADR has a beta of 1.26, suggesting that its share price is 26% more volatile than the S&P 500. Comparatively, AeroVironment has a beta of 1.41, suggesting that its share price is 41% more volatile than the S&P 500.

Earnings & Valuation

This table compares COBHAM PLC/ADR and AeroVironment”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
COBHAM PLC/ADR	$2.18 billion	2.54	$98.11 million	$0.11	40.82
AeroVironment	$1.98 billion	3.78	-$265.12 million	($3.68)	-39.94

COBHAM PLC/ADR has higher revenue and earnings than AeroVironment. AeroVironment is trading at a lower price-to-earnings ratio than COBHAM PLC/ADR, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares COBHAM PLC/ADR and AeroVironment’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
COBHAM PLC/ADR	N/A	N/A	N/A
AeroVironment	-9.00%	3.71%	2.90%

Analyst Recommendations

This is a breakdown of recent ratings for COBHAM PLC/ADR and AeroVironment, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
COBHAM PLC/ADR	0	0	0	0	0.00
AeroVironment	1	3	18	2	2.88

AeroVironment has a consensus target price of $266.68, indicating a potential upside of 81.44%. Given AeroVironment’s stronger consensus rating and higher probable upside, analysts plainly believe AeroVironment is more favorable than COBHAM PLC/ADR.

Institutional and Insider Ownership

86.4% of AeroVironment shares are owned by institutional investors. 0.8% of AeroVironment shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

AeroVironment beats COBHAM PLC/ADR on 10 of the 15 factors compared between the two stocks.

About COBHAM PLC/ADR

Cobham plc provides a range of technologies and services to commercial, defense, aerospace, space, and security markets in the United Kingdom, the United States, other European countries, Australia, Asia, and internationally. The company operates in four segments: Communications and Connectivity, Mission Systems, Advanced Electronic Solutions, and Aviation Services. The Communications and Connectivity segment offers equipment and solutions for the aerospace, avionics, satellite, radio, wireless, antenna, and mobile connectivity markets. The Mission Systems segment provides safety and survival systems for extreme environments; nose-to-tail aerial refueling systems; and wing-tip to wing-tip mission systems for jets, transport aircraft, and rotorcraft. The Advanced Electronic Solutions segment offers critical solutions for communication on land, at sea, in the air, and in space through off-the-shelf and customized products, which include radio frequency, microwave, microelectronics, antenna subsystems, and motion control solutions. This segment serves defense, radar, electronic warfare, X-ray imaging, medical, and industrial markets. The Aviation Services segment delivers outsourced aviation services for military and commercial customers through military training, special mission flights, outsourced commercial aviation, fly-in fly-out, and aircraft engineering services. Cobham plc was founded in 1934 and is headquartered in Wimborne, the United Kingdom.

About AeroVironment

AeroVironment, Inc. designs, develops, produces, delivers, and supports a portfolio of robotic systems and related services for government agencies and businesses in the United States and internationally. It operates through Small Unmanned Aircraft Systems (SUAS), Tactical Missile System (TMS), Medium Unmanned Aircraft Systems (MUAS), and High Altitude Pseudo-Satellite Systems (HAPS) segments. The company supplies UAS, TMS, unmanned ground vehicle, and related services primarily to organizations within the U.S. Department of Defense, other federal agencies, and to international allied governments. It also designs, engineers, tools, and manufactures unmanned aerial and aircraft systems, including airborne platforms, payloads and payload integration, ground control systems, and ground support equipment and other items and services related to unmanned aircraft systems. In addition, the company offers small UAS products, including training, spare parts, product repair, product replacement, and the customer contracted operation. Further, it develops high-altitude pseudo-satellite UAS systems. AeroVironment, Inc. was incorporated in 1971 and is headquartered in Arlington, Virginia.