Reviewing Esterline Technologies (ESL) & Precision Castparts (PCP)

Esterline Technologies (NYSE: ESL) and Precision Castparts (NYSE:PCP) are both aerospace companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, profitability, dividends, valuation, earnings, risk and analyst recommendations.

Analyst Recommendations

This is a breakdown of current recommendations for Esterline Technologies and Precision Castparts, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Esterline Technologies 3 5 0 0 1.63
Precision Castparts 0 0 0 0 N/A

Esterline Technologies currently has a consensus price target of $79.71, suggesting a potential upside of 6.64%. Given Esterline Technologies’ higher probable upside, research analysts plainly believe Esterline Technologies is more favorable than Precision Castparts.

Valuation & Earnings

This table compares Esterline Technologies and Precision Castparts’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Esterline Technologies $2.00 billion 1.11 $117.38 million $2.22 33.67
Precision Castparts N/A N/A N/A $9.53 24.65

Esterline Technologies has higher revenue and earnings than Precision Castparts. Precision Castparts is trading at a lower price-to-earnings ratio than Esterline Technologies, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Esterline Technologies and Precision Castparts’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Esterline Technologies 3.31% 6.89% 3.96%
Precision Castparts 15.17% 12.16% 6.86%

Institutional & Insider Ownership

93.6% of Esterline Technologies shares are held by institutional investors. 1.4% of Esterline Technologies shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

Precision Castparts pays an annual dividend of $0.12 per share and has a dividend yield of 0.1%. Esterline Technologies does not pay a dividend. Precision Castparts pays out 1.3% of its earnings in the form of a dividend.

Summary

Esterline Technologies beats Precision Castparts on 6 of the 11 factors compared between the two stocks.

Esterline Technologies Company Profile

Esterline Technologies Corporation is a specialized manufacturing company. The Company designs, manufactures and markets engineered products and systems for application within the industries it serves. The Company operates through three segments: Avionics & Controls, Sensors & Systems, and Advanced Materials. The Company serves aerospace and defense customers. The Company’s Avionics & Controls business segment includes avionics systems, control and communication systems, and interface technologies capabilities. The Company’s Sensors & Systems business segment includes power systems, connection technologies and advanced sensors capabilities. The Company’s Advanced Materials business segment includes engineered materials and defense technologies capabilities. The Company designs and manufactures ruggedized military personal communication equipment, primarily headsets, handsets and field communications.

Precision Castparts Company Profile

Precision Castparts Corp. is a manufacturer of metal components and products. The Company has three business segments: Investment Cast Products, Forged Products and Airframe Products. The Company’s Investment Cast Products segment manufactures investment castings and provides related investment casting materials and alloys, for aircraft engines, industrial gas turbine (IGT) engines, airframes, armaments, medical prostheses, unmanned aerial vehicles and other industrial applications. The Company’s Forged Products segment manufactures forged components from titanium and nickel-based alloys, and nickel, titanium and cobalt-based alloys for aerospace and non-aerospace markets, which include products for oil and gas, chemical processing and pollution control applications. The Company’s Airframe Products segment manufactures fasteners, fastener systems, fluid fittings, aerostructures and precision components, primarily for aerospace applications.

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