Head-To-Head Survey: Aercap (NYSE:AER) versus Ryder System (NYSE:R)

Ryder System (NYSE:R) and Aercap (NYSE:AER) are both transportation companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, dividends, risk, profitability, earnings and institutional ownership.

Insider & Institutional Ownership

87.5% of Ryder System shares are held by institutional investors. Comparatively, 96.4% of Aercap shares are held by institutional investors. 5.2% of Ryder System shares are held by insiders. Comparatively, 0.5% of Aercap shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Volatility & Risk

Ryder System has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500. Comparatively, Aercap has a beta of 1.39, suggesting that its stock price is 39% more volatile than the S&P 500.

Profitability

This table compares Ryder System and Aercap’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ryder System	3.96%	17.64%	3.28%
Aercap	26.53%	13.84%	3.26%

Dividends

Ryder System pays an annual dividend of $3.24 per share and has a dividend yield of 2.1%. Aercap pays an annual dividend of $1.08 per share and has a dividend yield of 0.9%. Ryder System pays out 28.2% of its earnings in the form of a dividend. Aercap pays out 9.6% 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. Ryder System has raised its dividend for 20 consecutive years and Aercap has raised its dividend for 2 consecutive years. Ryder System is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Ryder System and Aercap, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ryder System	0	2	3	0	2.60
Aercap	1	1	7	0	2.67

Ryder System currently has a consensus price target of $168.60, indicating a potential upside of 8.05%. Aercap has a consensus price target of $119.25, indicating a potential upside of 4.06%. Given Ryder System’s higher probable upside, research analysts plainly believe Ryder System is more favorable than Aercap.

Earnings & Valuation

This table compares Ryder System and Aercap”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ryder System	$12.64 billion	0.51	$489.00 million	$11.47	13.60
Aercap	$8.00 billion	2.68	$2.10 billion	$11.27	10.17

Aercap has lower revenue, but higher earnings than Ryder System. Aercap is trading at a lower price-to-earnings ratio than Ryder System, indicating that it is currently the more affordable of the two stocks.

Summary

Ryder System beats Aercap on 9 of the 17 factors compared between the two stocks.

About Ryder System

Ryder System, Inc. operates as a logistics and transportation company worldwide. It operates through three segments: Fleet Management Solutions (FMS), Supply Chain Solutions (SCS), and Dedicated Transportation Solutions (DTS). The FMS segment offers full-service leasing and leasing with flexible maintenance options; commercial vehicle rental services; and contract or transactional maintenance services of trucks, tractors, and trailers; access to diesel fuel; and fuel planning and tax reporting, cards, and monitoring services, and centralized billing, as well as sells used vehicles through its retail sales centers and www.ryder.com/used-trucks website, as well as digital and technology support services. The DTS segment offers equipment, maintenance, drivers, administrative, and additional services, as well as routing and scheduling, fleet sizing, safety, regulatory compliance, risk management, and technology and communication systems support services. The SCS segment comprises distribution management services, such as designing and managing customer's distribution network and facilities; coordinating warehousing and transportation for inbound and outbound material flows; handling import and export for international shipments; coordinating just-in-time replenishment of component parts to manufacturing and final assembly; and offering shipments to customer distribution centers or end customer delivery points, as well as other value added services, such as light assembly of components. This segment also offers transportation management and brokerage services, such as shipment optimization, load scheduling, and delivery confirmation services; knowledge-based professional services; and e-commerce and last mile services. The company was founded in 1933 and is headquartered in Coral Gables, Florida.

About Aercap

AerCap Holdings N.V. engages in the lease, financing, sale, and management of commercial flight equipment in China, Hong Kong, Macau, the United States, Ireland, and internationally. The company offers aircraft asset management services, such as remarketing aircraft and engines; collecting rental and maintenance rent payments, monitoring aircraft maintenance, monitoring and enforcing contract compliance, and accepting delivery and redelivery of aircraft and engines; and conducting ongoing lessee financial performance reviews. Its aircraft asset management services also include periodically inspecting the leased aircraft and engines; coordinating technical modifications to aircraft to meet new lessee requirements; conducting restructuring negotiations in connection with lease defaults; repossessing aircraft and engines; arranging and monitoring insurance coverage; registering and de-registering aircraft; arranging for aircraft and engine valuations; and providing market research services. In addition, the company provides cash management services, including treasury services, such as the financing, refinancing, hedging, and ongoing cash management of vehicles; and administrative services comprising accounting and corporate secretarial services consisting of the preparation of budgets and financial statements. Further, it offers airframe and engine parts and supply chain solutions to airlines; maintenance, repair, and overhaul service providers; and aircraft parts distributors. The company had a portfolio of owned, managed, or on order aircraft. AerCap Holdings N.V. was founded in 1995 and is headquartered in Dublin, Ireland.