Chemring Group (OTC:CMGMF) and Magellan Aerospace (OTCMKTS:MALJF) Critical Contrast

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

Analyst Recommendations

This is a summary of current ratings and price targets for Magellan Aerospace and Chemring Group, as provided by MarketBeat.

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

Magellan Aerospace presently has a consensus target price of $14.00, suggesting a potential upside of 101.44%. Given Magellan Aerospace’s stronger consensus rating and higher probable upside, analysts clearly believe Magellan Aerospace is more favorable than Chemring Group.

Valuation & Earnings

This table compares Magellan Aerospace and Chemring Group”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	7.29
Chemring Group	N/A	N/A	N/A	C($0.60)	-7.33

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

Profitability

This table compares Magellan Aerospace and Chemring Group’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
Chemring Group	N/A	N/A	N/A

Insider & Institutional Ownership

3.9% of Magellan Aerospace shares are held by institutional investors. Comparatively, 60.7% of Chemring Group shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

Magellan Aerospace pays an annual dividend of $0.15 per share and has a dividend yield of 2.2%. Chemring Group pays an annual dividend of C$0.04 per share and has a dividend yield of 0.9%. Magellan Aerospace pays out 15.7% of its earnings in the form of a dividend. Chemring Group pays out -6.3% 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.

Summary

Magellan Aerospace beats Chemring Group on 6 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 Chemring Group

Chemring Group PLC provides countermeasures, sensors, information, and energetic products in the United States, the United Kingdom, Europe, the Asia pacific, and internationally. The company offers sensors and information products, such as point chemical detector, sensor, JSLSCAD, and I-SCAD; miniature radar altimeter, R Visor, 3D radars, husky mounted detection system, groundshark, MDS-10, and groundhunters; resolve, locate, LOCATE-T, and viper products; and advisory, research, and design and engineering services. It also provides countermeasures and energetics products, including aerodynamic and kinematic flare; chaf cart and pack; seduction and distraction cart; initiator, separation and explosive bolts, nuts, and pin pullers and pushers; initiators, actuators, retractors and systems, time delay devices, ejection handles and sequencers, gas generators, cutters, canopy remover thruster, and thermal battery; wing, fin, elevon deployment actuators, wing and tail retention systems, separation nuts, pyrovalves, and safe and arm devices; joint combined aircrew system, system communication and oxygen, and altitude combined aircrew system tester; HMX, RDX, NTO, Alkyl-NENA, and acetic acid; and advanced performance bangalore torpedo, SX4, PE8, charge demolition user filled conical and linear, igniter safety fuze electric, detonating cord booster, demolition detonator electric and non-electric, detonating cord, and safety fuze. In addition, the company offers metron actuators and gas generators; igniters and fuzeheads, and canopy severance cords and explosive transmission cords; extruded double base propellant for ejection systems and rocket motors; and PED MK 2, breach MC, shrike exploder, mini shrike, long range initiation system, WASP, pigstick, hotrod, mini and midi disruptor, freeze neutralizing kit, fuse extractor, and rocket wrench. Chemring Group PLC was incorporated in 1905 and is headquartered in Romsey, the United Kingdom.