AeroVironment (NASDAQ: AVAV) and DigitalGlobe (NYSE:DGI) are both industrials companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, dividends, institutional ownership, earnings and profitability.

Volatility and Risk

AeroVironment has a beta of 1.16, suggesting that its stock price is 16% more volatile than the S&P 500. Comparatively, DigitalGlobe has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for AeroVironment and DigitalGlobe, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AeroVironment 0 4 0 0 2.00
DigitalGlobe 0 3 1 0 2.25

AeroVironment currently has a consensus price target of $39.50, indicating a potential downside of 26.95%. DigitalGlobe has a consensus price target of $35.83, indicating a potential upside of 4.17%. Given DigitalGlobe’s stronger consensus rating and higher probable upside, analysts clearly believe DigitalGlobe is more favorable than AeroVironment.

Institutional and Insider Ownership

74.0% of AeroVironment shares are owned by institutional investors. Comparatively, 93.8% of DigitalGlobe shares are owned by institutional investors. 11.0% of AeroVironment shares are owned by company insiders. Comparatively, 2.3% of DigitalGlobe shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares AeroVironment and DigitalGlobe’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AeroVironment 10.42% 8.23% 7.39%
DigitalGlobe 0.64% 2.40% 0.97%

Valuation and Earnings

This table compares AeroVironment and DigitalGlobe’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AeroVironment $264.87 million 4.87 $12.47 million $1.27 42.57
DigitalGlobe $725.40 million 2.95 $26.50 million $0.02 1,720.86

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

Summary

DigitalGlobe beats AeroVironment on 8 of the 14 factors compared between the two stocks.

AeroVironment Company Profile

AeroVironment, Inc. designs, develops, produces, supports and operates a portfolio of products and services for government agencies, businesses and consumers. The Company operates through two segments: Unmanned Aircraft Systems (UAS), which focuses primarily on the design, development, production, support and operation of UAS and tactical missile systems that provide situational awareness, multi-band communications, force protection and other mission effects, and Efficient Energy Systems (EES), which focuses primarily on the design, development, production, marketing, support and operation of electric energy systems. The Company supplies UAS, tactical missile systems and related services primarily to organizations within the United States Department of Defense (DoD). The Company also supplies charging systems and services for electric vehicles (EVs), and power cycling and test systems to commercial, consumer and government customers.

DigitalGlobe Company Profile

DigitalGlobe, Inc. is a provider of Earth imagery, data and analysis. The Company’s imagery solutions and other services support a range of uses, including mission-planning, mapping and analysis, environmental monitoring, oil and gas exploration and infrastructure management. The Company’s imagery solutions and other services are sourced from its own satellite constellation and third-party providers. The Company sells its products and services through a combination of direct and indirect channels, consisting of a global network of resellers, strategic partners and direct enterprise sales to its United States Government and Diversified Commercial customer groups. The Company offers products consisting of imagery from its constellation of satellites, and provides geospatial products and services. The Company processes its imagery to varying levels according to its customers’ specifications and delivers its products using the distribution method.

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