Reviewing TAT Technologies (NASDAQ:TATT) and Spirit Aerosystems (NYSE:SPR)

Spirit Aerosystems (NYSE:SPR) and TAT Technologies (NASDAQ:TATT) are both aerospace companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, analyst recommendations and dividends.

Analyst Recommendations

This is a summary of current recommendations and price targets for Spirit Aerosystems and TAT Technologies, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Spirit Aerosystems	1	3	0	1	2.20
TAT Technologies	1	0	6	0	2.71

Spirit Aerosystems currently has a consensus price target of $38.63, suggesting a potential upside of 8.89%. TAT Technologies has a consensus price target of $47.80, suggesting a potential upside of 23.30%. Given TAT Technologies’ stronger consensus rating and higher possible upside, analysts clearly believe TAT Technologies is more favorable than Spirit Aerosystems.

Dividends

Spirit Aerosystems pays an annual dividend of $0.04 per share and has a dividend yield of 0.1%. TAT Technologies pays an annual dividend of $0.34 per share and has a dividend yield of 0.9%. Spirit Aerosystems pays out -0.2% of its earnings in the form of a dividend. TAT Technologies pays out 25.6% 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.

Institutional and Insider Ownership

93.6% of Spirit Aerosystems shares are owned by institutional investors. Comparatively, 15.1% of TAT Technologies shares are owned by institutional investors. 0.9% of Spirit Aerosystems shares are owned by insiders. Comparatively, 8.8% of TAT Technologies shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Risk & Volatility

Spirit Aerosystems has a beta of 1.7, indicating that its stock price is 70% more volatile than the S&P 500. Comparatively, TAT Technologies has a beta of 0.85, indicating that its stock price is 15% less volatile than the S&P 500.

Profitability

This table compares Spirit Aerosystems and TAT Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Spirit Aerosystems	-37.46%	N/A	-26.28%
TAT Technologies	8.21%	10.90%	7.76%

Valuation and Earnings

This table compares Spirit Aerosystems and TAT Technologies”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Spirit Aerosystems	$6.39 billion	0.65	-$2.14 billion	($22.11)	-1.60
TAT Technologies	$172.53 million	2.82	$11.17 million	$1.33	29.15

TAT Technologies has lower revenue, but higher earnings than Spirit Aerosystems. Spirit Aerosystems is trading at a lower price-to-earnings ratio than TAT Technologies, indicating that it is currently the more affordable of the two stocks.

Summary

TAT Technologies beats Spirit Aerosystems on 12 of the 17 factors compared between the two stocks.

About Spirit Aerosystems

Spirit AeroSystems Holdings, Inc. engages in the design, engineering, manufacture, and marketing of commercial aerostructures worldwide. It operates through three segments: Commercial, Defense & Space, and Aftermarket. The Commercial segment offers forward, mid, and rear fuselage sections and systems, floor beams, nacelles, struts/pylons, horizontal and vertical stabilizers, flaps and slats flight control surfaces, wing structures, and wing systems. This segment primarily serves commercial and business/regional jet programs. The Defense & Space segment engages in the fabrication, bonding, assembly, testing, tooling, processing, engineering analysis, and training on fuselage, strut, nacelle, and wing aerostructures; provision of missiles and hypersonics solutions, such as solid rocket motor throats, nozzles, re-entry vehicle thermal protections systems; forward cockpit and cabin, and fuselage work on rotorcraft aerostructures; and classified programs. This segment primarily serves U.S. Government defense programs. The Aftermarket segment provides maintenance, repair, and overhaul services; fuselage, strut, nacelle, and wing aerostructures spare parts; repair services for radome, flight control surfaces, and nacelles; rotable assets trading and leasing; and engineering services. This segment primarily serves both commercial and defense and space programs. The company was formerly known as Mid-Western Aircraft Systems Holdings, Inc. Spirit AeroSystems Holdings, Inc. was founded in 1927 and is headquartered in Wichita, Kansas.

About TAT Technologies

TAT Technologies Ltd., together with its subsidiaries, provides solutions and services to the commercial and military aerospace, and ground defense industries in the United States, Israel, and internationally. The company operates through four segments: Original Equipment Manufacturing (OEM) of Heat Transfer Solutions and Aviation Accessories; Maintenance, Repair, and Overhaul (MRO) Services for Heat Transfer Components and OEM of Heat Transfer Solutions; MRO Services for Aviation Components; and Overhaul and Coating of Jet Engine Components. It designs, develops, and manufactures a range of heat transfer solutions, such as pre-cooler and oil/fuel hydraulic heat exchangers used in mechanical and electronic systems in commercial, military, and business aircraft; environmental control and power electronics cooling systems for use in aircraft and ground applications; and a range of other mechanical aircraft accessories and systems, such as pumps, valves, and turbine power units. The company provides MRO services for heat transfer components, as well as for manufacturing heat transfer solutions; and aviation components. In addition, it engages in the operation of a repair station, which provides heat transfer MRO services for airlines, air cargo carriers, maintenance service centers, and the military; and the overhaul and coating of jet engine components, including turbine vanes and blades, fan blades, variable inlet guide vanes, and afterburner flaps. The company was formerly known as Galagraph Ltd. and changed its name to TAT Technologies Ltd. in May 1992. TAT Technologies Ltd. was founded in 1969 and is headquartered in Netanya, Israel.