Contrasting Howmet Aerospace (HWM) and Its Peers

Howmet Aerospace (NYSE:HWM) is one of 33 publicly-traded companies in the “AEROSP/DEFENSE” industry, but how does it contrast to its competitors? We will compare Howmet Aerospace to related businesses based on the strength of its profitability, analyst recommendations, earnings, risk, dividends, institutional ownership and valuation.

Profitability

This table compares Howmet Aerospace and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Howmet Aerospace	16.64%	27.25%	11.48%
Howmet Aerospace Competitors	-410.20%	-70.11%	-13.94%

Volatility and Risk

Howmet Aerospace has a beta of 1.44, suggesting that its stock price is 44% more volatile than the S&P 500. Comparatively, Howmet Aerospace’s competitors have a beta of 1.16, suggesting that their average stock price is 16% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations for Howmet Aerospace and its competitors, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Howmet Aerospace	0	4	13	0	2.76
Howmet Aerospace Competitors	392	2126	3296	119	2.53

Howmet Aerospace presently has a consensus price target of $142.13, suggesting a potential downside of 19.14%. As a group, “AEROSP/DEFENSE” companies have a potential upside of 7.55%. Given Howmet Aerospace’s competitors higher probable upside, analysts clearly believe Howmet Aerospace has less favorable growth aspects than its competitors.

Dividends

Howmet Aerospace pays an annual dividend of $0.40 per share and has a dividend yield of 0.2%. Howmet Aerospace pays out 13.0% of its earnings in the form of a dividend. As a group, “AEROSP/DEFENSE” companies pay a dividend yield of 1.6% and pay out 39.3% of their earnings in the form of a dividend. Howmet Aerospace has raised its dividend for 5 consecutive years.

Institutional and Insider Ownership

90.5% of Howmet Aerospace shares are owned by institutional investors. Comparatively, 53.5% of shares of all “AEROSP/DEFENSE” companies are owned by institutional investors. 1.1% of Howmet Aerospace shares are owned by insiders. Comparatively, 10.4% of shares of all “AEROSP/DEFENSE” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Howmet Aerospace and its competitors top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Howmet Aerospace	$7.43 billion	$1.16 billion	57.25
Howmet Aerospace Competitors	$18.86 billion	$730.78 million	9.63

Howmet Aerospace’s competitors have higher revenue, but lower earnings than Howmet Aerospace. Howmet Aerospace is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Summary

Howmet Aerospace beats its competitors on 10 of the 15 factors compared.

Howmet Aerospace Company Profile

Howmet Aerospace Inc. provides advanced engineered solutions for the aerospace and transportation industries in the United States, Japan, France, Germany, the United Kingdom, Mexico, Italy, Canada, Poland, China, and internationally. It operates through four segments: Engine Products, Fastening Systems, Engineered Structures, and Forged Wheels. The Engine Products segment offers airfoils and seamless rolled rings primarily for aircraft engines and industrial gas turbines; and rotating and structural parts. The Fastening Systems segment produces aerospace fastening systems, as well as commercial transportation, industrial, and other fasteners; and latches, bearings, fluid fittings, and installation tools. The Engineered Structures segment provides titanium ingots and mill products, aluminum and nickel forgings, and machined components and assemblies for aerospace and defense applications; and titanium forgings, extrusions, and forming and machining services for airframe, wing, aero-engine, and landing gear components. The Forged Wheels segment offers forged aluminum wheels and related products for heavy-duty trucks and commercial transportation markets. The company was formerly known as Arconic Inc. Howmet Aerospace Inc. was founded in 1888 and is based in Pittsburgh, Pennsylvania.