Transdigm Group (NYSE:TDG) vs. Innovative Solutions and Support (NASDAQ:ISSC) Head-To-Head Analysis

Innovative Solutions and Support (NASDAQ:ISSC) and Transdigm Group (NYSE:TDG) are both aerospace companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, valuation, institutional ownership, earnings, profitability, risk and analyst recommendations.

Analyst Ratings

This is a breakdown of current ratings for Innovative Solutions and Support and Transdigm Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Innovative Solutions and Support	0	1	1	2	3.25
Transdigm Group	1	5	13	1	2.70

Innovative Solutions and Support presently has a consensus price target of $16.50, suggesting a potential upside of 67.51%. Transdigm Group has a consensus price target of $1,576.29, suggesting a potential upside of 17.76%. Given Innovative Solutions and Support’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Innovative Solutions and Support is more favorable than Transdigm Group.

Volatility & Risk

Innovative Solutions and Support has a beta of 0.77, suggesting that its stock price is 23% less volatile than the S&P 500. Comparatively, Transdigm Group has a beta of 0.94, suggesting that its stock price is 6% less volatile than the S&P 500.

Valuation & Earnings

This table compares Innovative Solutions and Support and Transdigm Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Innovative Solutions and Support	$47.20 million	3.68	$7.00 million	$0.66	14.92
Transdigm Group	$8.83 billion	8.54	$2.07 billion	$32.08	41.72

Transdigm Group has higher revenue and earnings than Innovative Solutions and Support. Innovative Solutions and Support is trading at a lower price-to-earnings ratio than Transdigm Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Innovative Solutions and Support and Transdigm Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Innovative Solutions and Support	15.10%	23.86%	14.15%
Transdigm Group	21.69%	-31.91%	9.53%

Institutional and Insider Ownership

28.5% of Innovative Solutions and Support shares are held by institutional investors. Comparatively, 95.8% of Transdigm Group shares are held by institutional investors. 4.4% of Innovative Solutions and Support shares are held by company insiders. Comparatively, 4.1% of Transdigm Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Transdigm Group beats Innovative Solutions and Support on 9 of the 15 factors compared between the two stocks.

About Innovative Solutions and Support

Innovative Solutions and Support, Inc., a systems integrator, designs, develops, manufactures, sells, and services flight guidance, autothrottles, and cockpit display systems in the United States and internationally. It offers flat panel display systems that replicate the display of analog or digital displays on one screen and replace existing displays in legacy aircraft, as well as used for security monitoring on-board aircraft and as tactical workstations on military aircraft; and flight deck management system, a navigation and performance computer that upgrade for commercial air transport aircraft. The company also provides integrated standby units, which incorporate the measurement and display of attitude, altitude, airspeed, and navigation data into a single backup navigation instrument for military, commercial air transport, and corporate/general aviation applications. In addition, it offers digital air data computers that calculate various air data parameters, such as altitude, airspeed, vertical speed, angle of attack, and other information; integrated air data computers and display units, which calculate and convey air data information; altitude displays that convey aircraft altitude measurements; airspeed displays that convey various airspeed measurements; and altitude alerters. Further, the company offers the engine and fuel displays that convey information related to fuel and oil levels, and engine activity, including oil and hydraulic pressure and temperature; integrated global navigation systems; ThrustSense, a full regime autothrottle; and utility management systems. It serves commercial air transport carriers and corporate/general aviation companies, the Department of Defense and its commercial contractors, aircraft operators, aircraft modification centers, government agencies, and foreign militaries, as well as original equipment manufacturers. Innovative Solutions and Support, Inc. was incorporated in 1988 and is based in Exton, Pennsylvania.

About Transdigm Group

TransDigm Group Incorporated designs, produces, and supplies aircraft components in the United States and internationally. The Power & Control segment offers mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, specialized pumps and valves, power conditioning devices, specialized AC/DC electric motors and generators, batteries and chargers, databus and power controls, sensor products, switches and relay panels, hoists, winches and lifting devices, and cargo loading and handling systems. This segment serves engine and power system and subsystem suppliers, airlines, third party maintenance suppliers, military buying agencies, and repair depots. The Airframe segment provides engineered latching and locking devices, engineered rods, engineered connectors and elastomer sealing solutions, cockpit security components and systems, cockpit displays, engineered audio, radio and antenna systems, lavatory components, seat belts and safety restraints, engineered and customized interior surfaces and related components, thermal protection and insulation products, lighting and control technology, and parachutes. This segment serves airframe manufacturers, cabin system and subsystem suppliers, airlines, third party maintenance suppliers, military buying agencies, and repair depots. The Non-aviation segment offers seat belts and safety restraints for ground transportation applications; electro-mechanical actuators for space applications; hydraulic/electromechanical actuators and fuel valves for land-based gas turbines; refueling systems for heavy equipment used in mining, construction, and other industries; and turbine controls for the energy and oil and gas markets. This segment serves off-road vehicle and subsystem suppliers, child restraint system suppliers, and satellite and space system suppliers; and manufacturers of heavy equipment. TransDigm Group Incorporated was founded in 1993 and is based in Cleveland, Ohio.