Critical Contrast: Transdigm Group (NYSE:TDG) vs. Boeing (NYSE:BA)

Boeing (NYSE:BA) and Transdigm Group (NYSE:TDG) are both large-cap industrials companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, earnings, profitability, analyst recommendations, institutional ownership, valuation and dividends.

Risk and Volatility

Boeing has a beta of 1.26, meaning that its stock price is 26% more volatile than the S&P 500. Comparatively, Transdigm Group has a beta of 0.96, meaning that its stock price is 4% less volatile than the S&P 500.

Valuation and Earnings

This table compares Boeing and Transdigm Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Boeing	$94.91 billion	1.43	$2.23 billion	$9.19	18.73
Transdigm Group	$8.83 billion	7.40	$2.07 billion	$32.96	35.46

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

Institutional and Insider Ownership

64.8% of Boeing shares are owned by institutional investors. Comparatively, 95.8% of Transdigm Group shares are owned by institutional investors. 0.1% of Boeing shares are owned by company insiders. Comparatively, 3.2% of Transdigm Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Boeing and Transdigm Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Boeing	7.98%	-42.40%	-1.53%
Transdigm Group	19.69%	-23.65%	9.12%

Analyst Ratings

This is a summary of recent ratings and price targets for Boeing and Transdigm Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Boeing	3	8	21	1	2.61
Transdigm Group	0	13	5	0	2.28

Boeing presently has a consensus target price of $246.92, suggesting a potential upside of 43.45%. Transdigm Group has a consensus target price of $1,428.40, suggesting a potential upside of 22.23%. Given Boeing’s stronger consensus rating and higher possible upside, analysts clearly believe Boeing is more favorable than Transdigm Group.

Summary

Transdigm Group beats Boeing on 8 of the 15 factors compared between the two stocks.

About Boeing

The Boeing Company, together with its subsidiaries, designs, develops, manufactures, sells, services, and supports commercial jetliners, military aircraft, satellites, missile defense, human space flight and launch systems, and services worldwide. The company operates through Commercial Airplanes; Defense, Space & Security; and Global Services segments. The Commercial Airplanes segment develops, produces, and markets commercial jet aircraft for passenger and cargo requirements, as well as provides fleet support services. The Defense, Space & Security segment engages in the research, development, production, and modification of manned and unmanned military aircraft and weapons systems; strategic defense and intelligence systems, which include strategic missile and defense systems, command, control, communications, computers, intelligence, surveillance and reconnaissance, cyber and information solutions, and intelligence systems; and satellite systems, such as government and commercial satellites, and space exploration. The Global Services segment offers products and services, including supply chain and logistics management, engineering, maintenance and modifications, upgrades and conversions, spare parts, pilot and maintenance training systems and services, technical and maintenance documents, and data analytics and digital services to commercial and defense customers. The Boeing Company was incorporated in 1916 and is based in Arlington, Virginia.

About Transdigm Group

TransDigm Group Incorporated designs, produces, and supplies aircraft components in the United States and internationally. The Power & Control segment offers mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, specialized pumps and valves, power conditioning devices, specialized AC/DC electric motors and generators, batteries and chargers, databus and power controls, sensor products, switches and relay panels, hoists, winches and lifting devices, and cargo loading and handling systems. This segment serves engine and power system and subsystem suppliers, airlines, third party maintenance suppliers, military buying agencies, and repair depots. The Airframe segment provides engineered latching and locking devices, engineered rods, engineered connectors and elastomer sealing solutions, cockpit security components and systems, cockpit displays, engineered audio, radio and antenna systems, lavatory components, seat belts and safety restraints, engineered and customized interior surfaces and related components, thermal protection and insulation products, lighting and control technology, and parachutes. This segment serves airframe manufacturers, cabin system and subsystem suppliers, airlines, third party maintenance suppliers, military buying agencies, and repair depots. The Non-aviation segment offers seat belts and safety restraints for ground transportation applications; electro-mechanical actuators for space applications; hydraulic/electromechanical actuators and fuel valves for land-based gas turbines; refueling systems for heavy equipment used in mining, construction, and other industries; and turbine controls for the energy and oil and gas markets. This segment serves off-road vehicle and subsystem suppliers, child restraint system suppliers, and satellite and space system suppliers; and manufacturers of heavy equipment. TransDigm Group Incorporated was founded in 1993 and is based in Cleveland, Ohio.