Head to Head Review: Hexcel (NYSE:HXL) versus Optex Systems (NASDAQ:OPXS)

Hexcel (NYSE:HXLGet Free Report) and Optex Systems (NASDAQ:OPXSGet Free Report) are both aerospace companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, earnings, profitability, valuation and institutional ownership.

Institutional and Insider Ownership

95.5% of Hexcel shares are owned by institutional investors. Comparatively, 19.1% of Optex Systems shares are owned by institutional investors. 1.4% of Hexcel shares are owned by insiders. Comparatively, 30.3% of Optex Systems shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Hexcel and Optex Systems, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hexcel 1 7 2 0 2.10
Optex Systems 0 0 0 0 0.00

Hexcel currently has a consensus price target of $58.67, suggesting a potential upside of 2.39%. Given Hexcel’s stronger consensus rating and higher possible upside, research analysts clearly believe Hexcel is more favorable than Optex Systems.

Profitability

This table compares Hexcel and Optex Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hexcel 6.60% 10.36% 5.76%
Optex Systems 13.06% 25.10% 19.04%

Volatility & Risk

Hexcel has a beta of 1.28, meaning that its share price is 28% more volatile than the S&P 500. Comparatively, Optex Systems has a beta of 0.33, meaning that its share price is 67% less volatile than the S&P 500.

Dividends

Hexcel pays an annual dividend of $0.68 per share and has a dividend yield of 1.2%. Optex Systems pays an annual dividend of $0.08 per share and has a dividend yield of 0.7%. Hexcel pays out 45.0% of its earnings in the form of a dividend. Optex Systems pays out 11.3% 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. Hexcel has increased its dividend for 3 consecutive years. Hexcel is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Hexcel and Optex Systems”s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hexcel $1.89 billion 2.44 $132.10 million $1.51 37.95
Optex Systems $37.43 million 2.22 $3.77 million $0.71 16.93

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

Summary

Hexcel beats Optex Systems on 12 of the 17 factors compared between the two stocks.

About Hexcel

(Get Free Report)

Hexcel Corporation develops, manufactures, and markets carbon fibers, structural reinforcements, honeycomb structures, resins, and composite materials and parts for use in commercial aerospace, space and defense, and industrial applications. It operates through two segments, Composite Materials and Engineered Products. The Composite Materials segment manufactures and markets fabrics, multi-axials, specialty reinforcements, prepregs and other fiber-reinforced matrix materials, structural adhesives, molding compounds, tooling materials, polyurethane systems, and laminates that are used in military and commercial aircraft, wind turbine blades, recreational products, and other industrial applications, as well as in automotive, marine, and rail transportation. The Engineered Products segment manufactures and markets aircraft structures and finished aircraft components, including wing to body fairings, wing panels, flight deck panels, door liners, rotorcraft blades, spars, and tip caps; and aircraft structural sub-components and semi-finished components used in rotorcraft blades, engine nacelles, and aircraft surfaces, such as flaps, wings, elevators, and fairings; and RF interference control products for military and aerospace applications. This segment also provides interference control materials, structural composites, and services; dielectric absorber foams; magnetic absorbers; and thermoplastics for commercial and defense applications. The company sells its products directly through its managers, product managers, and sales personnel, as well as through independent distributors in the Americas, Europe, the Asia Pacific, India, and Africa. Hexcel Corporation was founded in 1946 and is headquartered in Stamford, Connecticut.

About Optex Systems

(Get Free Report)

Optex Systems Holdings, Inc manufactures and sells optical sighting systems and assemblies primarily for the U.S. department of defense, foreign military applications, and commercial markets in the United States. It offers periscopes, such as laser and non-laser protected plastic and glass periscopes, electronic M17 day/thermal periscopes, and vision blocks; sighting systems, including back up sights, digital day and night sighting systems, M36 thermal periscope, unity mirrors, optical weapon system support and maintenance, commander weapon station sights, and sight assembly refurbishments; howitzers comprising M137 telescope, M187 mount, M119 aiming device, XM10 and aiming circles; and applied optics center consisting of laser interference filter, optical assemblies, laser filter units, day windows, and specialty thin film coatings, as well as other products, such as muzzle reference systems, binoculars, collimators, optical lenses and elements, and windows. The company also provides various periscope configurations, rifle and surveillance sights, and night vision optical assemblies. Its products are installed on various types of U.S. military land vehicles, such as the Abrams, Bradley, and Stryker families of fighting vehicles, as well as light armored and armored security vehicles. The company offers its products directly to the federal government, prime contractors, and foreign governments. Optex Systems Holdings, Inc was founded in 1987 and is headquartered in Richardson, Texas. Optex Systems Holdings, Inc is a subsidiary of Sileas Corporation.

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