Universal Technical Institute (NYSE: UTI) and CAE (NYSE:CAE) are both consumer discretionary companies, but which is the superior business? We will compare the two companies based on the strength of their risk, institutional ownership, earnings, profitabiliy, dividends, valuation and analyst recommendations.

Dividends

CAE pays an annual dividend of $0.24 per share and has a dividend yield of 1.4%. Universal Technical Institute does not pay a dividend. CAE pays out 33.8% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of current recommendations and price targets for Universal Technical Institute and CAE, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Universal Technical Institute 0 0 0 0 N/A
CAE 0 6 2 0 2.25

CAE has a consensus target price of $19.17, suggesting a potential upside of 9.09%. Given CAE’s higher probable upside, analysts clearly believe CAE is more favorable than Universal Technical Institute.

Earnings and Valuation

This table compares Universal Technical Institute and CAE’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Universal Technical Institute $335.86 million 0.27 $9.65 million ($0.87) -4.16
CAE $2.08 billion 2.27 $389.76 million $0.71 24.75

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

Institutional & Insider Ownership

60.0% of Universal Technical Institute shares are owned by institutional investors. Comparatively, 57.5% of CAE shares are owned by institutional investors. 13.3% of Universal Technical Institute shares are owned by company insiders. Comparatively, 18.3% of CAE shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Volatility and Risk

Universal Technical Institute has a beta of 3.52, meaning that its stock price is 252% more volatile than the S&P 500. Comparatively, CAE has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500.

Profitability

This table compares Universal Technical Institute and CAE’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Universal Technical Institute -5.12% -6.91% -3.33%
CAE 9.30% 13.96% 5.39%

Summary

CAE beats Universal Technical Institute on 11 of the 14 factors compared between the two stocks.

About Universal Technical Institute

Universal Technical Institute, Inc. is a provider of postsecondary education for students seeking careers as professional automotive, diesel, collision repair, motorcycle and marine technicians as measured by total average undergraduate full-time enrollment and graduates. The Company offers undergraduate degree or diploma programs at approximately 12 campuses across the United States under the banner of various brands, including Universal Technical Institute (UTI), Motorcycle Mechanics Institute and Marine Mechanics Institute (collectively, MMI) and NASCAR Technical Institute (NASCAR Tech). The Company also offers manufacturer specific advanced training (MSAT) programs, including student-paid electives, at its campuses and manufacturer or dealer sponsored training at certain campuses and dedicated training centers. UTI offers automotive, diesel and industrial, and collision repair and refinishing programs.

About CAE

CAE Inc. provides training for the civil aviation, defense and security, and healthcare markets. The Company designs and integrates training solutions. It operates through three segments: Civil Aviation Training Solutions, Defense and Security, and Healthcare. The Company provides training solutions for flight, cabin, maintenance and ground personnel in commercial, business and helicopter aviation, a range of flight simulation training devices, as well as ab initio pilot training and crew sourcing services. The Company is a training systems integrator for defense forces across the air, land and sea domains, and for government and civil security organizations responsible for public safety. The Company designs, manufactures and markets simulators, simulation center management solutions and courseware for training of medical and allied healthcare students and clinicians in educational institutions, hospitals and defense organizations across the world.

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