Analyzing Innovative Solutions and Support (NASDAQ:ISSC) and Ducommun (NYSE:DCO)

Innovative Solutions and Support (NASDAQ:ISSC) and Ducommun (NYSE:DCO) are both industrials companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, earnings, dividends, analyst recommendations, institutional ownership and profitability.

Analyst Ratings

This is a summary of current ratings and recommmendations for Innovative Solutions and Support and Ducommun, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Innovative Solutions and Support	0	2	1	2	3.00
Ducommun	0	3	5	0	2.62

Innovative Solutions and Support currently has a consensus price target of $16.25, indicating a potential downside of 26.69%. Ducommun has a consensus price target of $196.67, indicating a potential upside of 41.78%. Given Ducommun’s higher possible upside, analysts plainly believe Ducommun is more favorable than Innovative Solutions and Support.

Profitability

This table compares Innovative Solutions and Support and Ducommun’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Innovative Solutions and Support	20.50%	30.53%	17.28%
Ducommun	5.89%	9.52%	5.37%

Institutional & Insider Ownership

28.5% of Innovative Solutions and Support shares are held by institutional investors. Comparatively, 92.2% of Ducommun shares are held by institutional investors. 5.9% of Innovative Solutions and Support shares are held by insiders. Comparatively, 5.0% of Ducommun shares are held 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.

Risk & Volatility

Innovative Solutions and Support has a beta of 0.59, meaning that its stock price is 41% less volatile than the S&P 500. Comparatively, Ducommun has a beta of 1.11, meaning that its stock price is 11% more volatile than the S&P 500.

Earnings and Valuation

This table compares Innovative Solutions and Support and Ducommun”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Innovative Solutions and Support	$93.15 million	4.26	$15.63 million	$1.05	21.11
Ducommun	$824.73 million	2.54	-$37.35 million	$3.32	41.78

Innovative Solutions and Support has higher earnings, but lower revenue than Ducommun. Innovative Solutions and Support is trading at a lower price-to-earnings ratio than Ducommun, indicating that it is currently the more affordable of the two stocks.

Summary

Innovative Solutions and Support beats Ducommun on 8 of the 15 factors compared between the two stocks.

About Innovative Solutions and Support

Innovative Solutions and Support, Inc. (NASDAQ: ISSC) designs, develops, manufactures and supports avionics systems for commercial, business and military aircraft. Its products include cockpit display and flight guidance systems, air data computers, and engine indication and crew alerting systems. The company serves both new aircraft programs and operators seeking to modernize or upgrade existing aircraft. Its systems are used in a range of aircraft platforms, and ISSC supports customers in markets around the world.

About Ducommun

Ducommun Inc. is a provider of engineering and manufacturing services for the aerospace, defense and industrial markets. Founded in 1849 in Los Angeles, the company began as a hardware business before expanding into manufacturing components for aerospace and defense applications. Ducommun operates through its Electronic Systems and Structural Systems businesses. Its products and services include electronic and electromechanical assemblies, circuit-card assemblies, interconnect systems, precision-machined parts, structural components and composite assemblies.