Safran (OTCMKTS:SAFRF) and Magellan Aerospace (OTCMKTS:MALJF) Financial Analysis

Magellan Aerospace (OTCMKTS:MALJF) and Safran (OTCMKTS:SAFRF) are both industrials companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, profitability, earnings, institutional ownership, valuation and dividends.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Magellan Aerospace	N/A	N/A	N/A	$0.95	7.43
Safran	N/A	N/A	N/A	$3.76	58.10

Magellan Aerospace is trading at a lower price-to-earnings ratio than Safran, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Magellan Aerospace and Safran, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Magellan Aerospace	0	0	1	0	3.00
Safran	0	0	0	0	0.00

Magellan Aerospace currently has a consensus price target of $14.00, suggesting a potential upside of 97.74%. Given Magellan Aerospace’s stronger consensus rating and higher probable upside, research analysts plainly believe Magellan Aerospace is more favorable than Safran.

Dividends

Magellan Aerospace pays an annual dividend of $0.15 per share and has a dividend yield of 2.1%. Safran pays an annual dividend of $1.12 per share and has a dividend yield of 0.5%. Magellan Aerospace pays out 15.7% of its earnings in the form of a dividend. Safran pays out 29.8% 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. Magellan Aerospace is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

3.9% of Magellan Aerospace shares are owned by institutional investors. Comparatively, 23.8% of Safran shares are owned by institutional investors. 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Magellan Aerospace	N/A	N/A	N/A
Safran	N/A	N/A	N/A

Summary

Magellan Aerospace beats Safran on 5 of the 8 factors compared between the two stocks.

About Magellan Aerospace

Magellan Aerospace Corporation, through its subsidiaries, engineers and manufactures aeroengine and aerostructure components for aerospace markets in Canada, the United States, and Europe. The company offers aero engine products, such as laser welded honeycomb and filament wound tubes, frames, compressor components, bypass ducts, hot section components, and aeroengine and helicopter drive shafts, as well as other flight safety critical machined components, including discs, seals, and spacers; and aerostructures comprising landing gear systems, wing ribs, spars and skins, bulkheads and fuselage components, tailcone assemblies, composite wing and fairing structures, horizontal and vertical stabilizers, plug and nozzle, exhaust systems, crown modules, and vane boxes and transition ducts. It also designs, engineers, and manufactures assemblies and components, such as stage rocket motors, solid propellant rocket motors, and rocket weapon systems; wire strike protection systems for helicopter safety; space solutions, including small satellite bus platforms and satellite subsystem equipment, as well as offers services for satellite assembly, integration, and testing; and aluminum and magnesium alloy sand castings, such as engine mounted accessory gearbox housings, helicopter power transmission housings, auxiliary power unit inlet and gearbox housings, engine front inlet and intermediate cases, engine front frames and fan cases, pump and accessory drive housings, and environmental control housings. In addition, the company offers maintenance, repair, and overhaul for various engine and components MRO, as well as lifecycle management services to logistics, fleet management, and engineering services. Magellan Aerospace Corporation was incorporated in 1996 and is headquartered in Mississauga, 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.