Saab (OTCMKTS:SAABY) and AerSale (NASDAQ:ASLE) Critical Review

Saab (OTCMKTS:SAABY) and AerSale (NASDAQ:ASLE) are both aerospace companies, but which is the better business? We will compare the two companies based on the strength of their earnings, risk, institutional ownership, profitability, valuation, analyst recommendations and dividends.

Profitability

This table compares Saab and AerSale’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Saab	7.45%	14.46%	5.43%
AerSale	-1.78%	-0.64%	-0.46%

Valuation and Earnings

This table compares Saab and AerSale”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Saab	$6.03 billion	4.87	$394.58 million	$0.61	44.93
AerSale	$345.07 million	0.78	$5.85 million	($0.11)	-52.41

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

Insider and Institutional Ownership

69.5% of AerSale shares are owned by institutional investors. 37.3% of AerSale shares are owned by company insiders. 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.

Analyst Recommendations

This is a breakdown of recent ratings for Saab and AerSale, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Saab	1	0	0	1	2.50
AerSale	0	3	1	0	2.25

AerSale has a consensus target price of $8.00, indicating a potential upside of 38.77%. Given AerSale’s higher probable upside, analysts clearly believe AerSale is more favorable than Saab.

Volatility & Risk

Saab has a beta of -0.01, indicating that its share price is 101% less volatile than the S&P 500. Comparatively, AerSale has a beta of 0.24, indicating that its share price is 76% less volatile than the S&P 500.

Summary

Saab beats AerSale on 10 of the 15 factors compared between the two stocks.

About Saab

Saab AB (publ) provides products, services, and solutions for military defense, aviation, and civil security markets worldwide. The company operates through Aeronautics, Dynamics, Surveillance, Kockums, and Combitech segments. The company develops military aviation technology, as well as conducts studies on manned and unmanned aircraft. It also provides ground combat weapons, missile systems, torpedoes, unmanned underwater vehicles, training and simulation systems, and signature management systems for armed forces; and niche products for the civil and defense market, such as underwater vehicles for the offshore industry. In addition, the company offers solutions for safety and security, surveillance and decision support, and threat detection, location, and protection, including airborne, ground-based and naval radar, electronic warfare, and combat systems, as well as C4I solutions. Additionally, it provides submarines with the Stirling system for air independent propulsion, surface combatants, mine hunting systems, and autonomous vessels; and systems development, systems integration, information security, systems security, communications, mechanics, and technical product information and logistics. Saab AB (publ) was incorporated in 1937 and is headquartered in Stockholm, Sweden.

About AerSale

AerSale Corporation provides aftermarket commercial aircraft, engines, and its parts to passenger and cargo airlines, leasing companies, original equipment manufacturers, and government and defense contractors, as well as maintenance, repair, and overhaul (MRO) service providers worldwide. It operates in two segments, Asset Management Solutions and Technical Operations (TechOps). The Asset Management Solutions segment engages in the sale and lease of aircraft, engines, and airframes, as well as disassembly of these assets for component parts. The TechOps segment provides internal and third-party aviation services, including internally developed engineered solutions, heavy aircraft maintenance and modification, and component MRO, as well as end-of-life disassembly services. This segment provides aircraft modifications, cargo and tanker conversions of aircraft, and aircraft storage; and MRO services for landing gear, thrust reversers, hydraulic systems, and other aircraft components. The company was founded in 2008 and is headquartered in Coral Gables, Florida.