Precision Castparts (PCP) vs. Triumph Group (TGI) Critical Survey

Precision Castparts (NYSE: PCP) and Triumph Group (NYSE:TGI) are both aerospace & defense – nec companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, risk, profitability, institutional ownership and earnings.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Precision Castparts and Triumph Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Precision Castparts 0 0 0 0 N/A
Triumph Group 2 5 3 0 2.10

Triumph Group has a consensus target price of $33.11, suggesting a potential upside of 13.78%. Given Triumph Group’s higher probable upside, analysts clearly believe Triumph Group is more favorable than Precision Castparts.

Dividends

Precision Castparts pays an annual dividend of $0.12 per share and has a dividend yield of 0.1%. Triumph Group pays an annual dividend of $0.16 per share and has a dividend yield of 0.5%. Precision Castparts pays out 1.3% of its earnings in the form of a dividend. Triumph Group pays out -7.5% 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. Triumph Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Precision Castparts and Triumph Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Precision Castparts 15.17% 12.16% 6.86%
Triumph Group -3.18% 27.18% 5.39%

Earnings & Valuation

This table compares Precision Castparts and Triumph Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Precision Castparts N/A N/A N/A $9.53 24.65
Triumph Group $3.53 billion 0.41 -$42.95 million ($2.13) -13.66

Precision Castparts has higher earnings, but lower revenue than Triumph Group. Triumph Group is trading at a lower price-to-earnings ratio than Precision Castparts, indicating that it is currently the more affordable of the two stocks.

Summary

Triumph Group beats Precision Castparts on 6 of the 10 factors compared between the two stocks.

About Precision Castparts

Precision Castparts Corp. is a manufacturer of metal components and products. The Company has three business segments: Investment Cast Products, Forged Products and Airframe Products. The Company’s Investment Cast Products segment manufactures investment castings and provides related investment casting materials and alloys, for aircraft engines, industrial gas turbine (IGT) engines, airframes, armaments, medical prostheses, unmanned aerial vehicles and other industrial applications. The Company’s Forged Products segment manufactures forged components from titanium and nickel-based alloys, and nickel, titanium and cobalt-based alloys for aerospace and non-aerospace markets, which include products for oil and gas, chemical processing and pollution control applications. The Company’s Airframe Products segment manufactures fasteners, fastener systems, fluid fittings, aerostructures and precision components, primarily for aerospace applications.

About Triumph Group

Triumph Group, Inc. designs, engineers, manufactures, repairs, overhauls and distributes a portfolio of aircraft components, accessories, subassemblies and systems. The Company offers a range of products and services to the aerospace industry through three segments: Triumph Aerostructures Group, whose companies are engaged in the design, manufacture, assembly and integration of metallic and composite aerostructures and structural components for the aerospace original equipment manufacturer (OEM) market; Triumph Aerospace Systems Group, whose companies design, engineer and manufacture a range of build-to-print components, assemblies and systems also for the OEM market, and Triumph Aftermarket Services Group, whose companies serve aircraft fleets, such as commercial airlines, the United States military and cargo carriers, through the maintenance, repair and overhaul (MRO) of aircraft components and accessories manufactured by third parties.

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