Analyzing Safran (OTCMKTS:SAFRY) & CAE (NYSE:CAE)

CAE (NYSE:CAE) and Safran (OTCMKTS:SAFRY) are both industrials companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, valuation, profitability, institutional ownership, risk, analyst recommendations and earnings.

Risk and Volatility

CAE has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500. Comparatively, Safran has a beta of 1.04, meaning that its stock price is 4% more volatile than the S&P 500.

Valuation and Earnings

This table compares CAE and Safran”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CAE	$4.91 billion	1.78	$226.62 million	$0.71	38.30
Safran	$35.81 billion	4.81	$8.12 billion	N/A	N/A

Safran has higher revenue and earnings than CAE.

Dividends

CAE pays an annual dividend of $0.33 per share and has a dividend yield of 1.2%. Safran pays an annual dividend of $0.66 per share and has a dividend yield of 0.6%. CAE pays out 46.3% of its earnings in the form of a dividend.

Profitability

This table compares CAE and Safran’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CAE	6.36%	7.45%	3.51%
Safran	N/A	N/A	N/A

Analyst Recommendations

This is a breakdown of current ratings for CAE and Safran, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CAE	1	4	5	0	2.40
Safran	0	5	3	2	2.70

CAE presently has a consensus target price of $31.00, indicating a potential upside of 14.01%. Given CAE’s higher probable upside, equities analysts clearly believe CAE is more favorable than Safran.

Insider & Institutional Ownership

67.4% of CAE shares are held by institutional investors. Comparatively, 0.1% of Safran shares are held by institutional investors. 18.3% of CAE shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

CAE beats Safran on 8 of the 15 factors compared between the two stocks.

About CAE

CAE Inc., together with its subsidiaries, provides simulation training and critical operations support solutions in Canada, the United States, the United Kingdom, Europe, Asia, the Oceania, Africa, and Rest of the Americas. It operates through two segments, Civil Aviation; and Defense and Security. The Civil Aviation segment offers training solutions for flight, cabin, maintenance, and ground personnel in commercial, business, and helicopter aviation; a range of flight simulation training devices; and ab initio pilot training and crew sourcing services, as well as aircraft flight operations solutions. The Defense and Security segment operates as a training and simulation provider that delivers platform-independent solutions to enable and enhance force readiness and security for defense forces, original equipment manufacturers (OEMs), government agencies, and public safety organizations. The company was formerly known as CAE Industries Ltd. and changed its name to CAE Inc. in 1993. CAE Inc. was incorporated in 1947 and is headquartered in Saint-Laurent, Canada.

About Safran

Safran SA, together with its subsidiaries, engages in the aerospace and defense businesses worldwide. The company operates through three segments: Aerospace Propulsion; Aircraft Equipment, Defense and Aerosystems; and Aircraft Interiors. The Aerospace Propulsion segment designs, develops, produces, and markets propulsion and mechanical power transmission systems for commercial aircraft, military transport, training and combat aircraft, civil and military helicopters, satellites, and drones; and offers maintenance, repair, and overhaul (MRO) services, as well as sells spare parts. The Aircraft Equipment, Defense and Aerosystems segment provides landing gears and brakes; nacelles and reversers; avionics, such as flight controls and onboard information systems; security systems, including evacuation slides and oxygen masks; onboard computers and fuel systems; electrical power management systems and related engineering services; and optronic equipment and sights, navigation equipment and sensors, infantry, and drones, as well as offers MRO services and sells spare parts. The Aircraft Interiors segment designs, develops, manufactures, and markets aircraft seats for passengers and crew; cabin equipment, overhead bins, class dividers, passenger service units, cabin interior solutions, chilling systems, galleys, electrical inserts, and trolleys and cargo equipment; and cabin and passenger solutions, such as water distribution equipment, lavatories, air systems, and in-flight entertainment and connectivity systems. Its products and services are used in civil and military aircraft, and helicopters. Safran SA was founded in 1896 and is based in Paris, France.