BWX Technologies (NYSE:BWXT) vs. TAT Technologies (NASDAQ:TATT) Critical Analysis

BWX Technologies (NYSE:BWXT) and TAT Technologies (NASDAQ:TATT) are both aerospace companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, valuation, dividends, risk, institutional ownership, analyst recommendations and profitability.

Analyst Ratings

This is a summary of recent ratings and target prices for BWX Technologies and TAT Technologies, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BWX Technologies	1	4	9	2	2.75
TAT Technologies	1	0	5	3	3.11

BWX Technologies presently has a consensus price target of $222.96, indicating a potential upside of 9.86%. TAT Technologies has a consensus price target of $57.29, indicating a potential upside of 54.53%. Given TAT Technologies’ stronger consensus rating and higher probable upside, analysts clearly believe TAT Technologies is more favorable than BWX Technologies.

Institutional & Insider Ownership

94.4% of BWX Technologies shares are held by institutional investors. Comparatively, 15.1% of TAT Technologies shares are held by institutional investors. 0.6% of BWX Technologies shares are held by company insiders. Comparatively, 8.8% of TAT Technologies shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares BWX Technologies and TAT Technologies”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BWX Technologies	$3.20 billion	5.81	$328.95 million	$3.74	54.26
TAT Technologies	$177.02 million	2.72	$16.82 million	$1.29	28.74

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

Dividends

BWX Technologies pays an annual dividend of $1.08 per share and has a dividend yield of 0.5%. TAT Technologies pays an annual dividend of $0.34 per share and has a dividend yield of 0.9%. BWX Technologies pays out 28.9% of its earnings in the form of a dividend. TAT Technologies pays out 26.4% 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. BWX Technologies has increased its dividend for 2 consecutive years. TAT Technologies is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

BWX Technologies has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500. Comparatively, TAT Technologies has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500.

Profitability

This table compares BWX Technologies and TAT Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BWX Technologies	10.20%	31.33%	9.62%
TAT Technologies	9.27%	9.47%	7.31%

Summary

BWX Technologies beats TAT Technologies on 11 of the 18 factors compared between the two stocks.

About BWX Technologies

BWX Technologies, Inc., together with its subsidiaries, manufactures and sells nuclear components in the United States, Canada, and internationally. It operates through two segments, Government Operations and Commercial Operations. The Government Operations segment designs and manufactures naval nuclear components, reactors, and nuclear fuel; fabrication activities; and supplies proprietary and sole-source valves, manifolds, and fittings to naval and commercial shipping customers. This segment also involved in manufacture of close-tolerance and equipment for nuclear applications; down blend government stockpiles of uranium; receives, stores, characterizes, dissolves, recovers, and purifies uranium-bearing materials; and supplies research reactor fuel elements for colleges, universities, and national laboratories, as well as components for defense applications. The Commercial Operations segment designs and manufactures commercial nuclear steam generators, heat exchangers, pressure vessels, and reactor components; and other auxiliary equipment, including containers for the storage of nuclear fuel and other high-level nuclear waste. This segment also offers nuclear fuel, fuel handling systems, tooling delivery systems, nuclear grade materials, and precisely machined components, and related services for CANDU nuclear power plants; provides in-plant inspection, maintenance, and modification services, as well as non-destructive examination and tooling/repair solutions; and manufactures medical radioisotopes, radiopharmaceuticals, and medical devices. The company was formerly known as The Babcock & Wilcox Company and changed its name to BWX Technologies, Inc. in June 2015. BWX Technologies, Inc. was founded in 1867 and is headquartered in Lynchburg, Virginia.

About TAT Technologies

TAT Technologies Ltd., together with its subsidiaries, provides solutions and services to the commercial and military aerospace, and ground defense industries in the United States, Israel, and internationally. The company operates through four segments: Original Equipment Manufacturing (OEM) of Heat Transfer Solutions and Aviation Accessories; Maintenance, Repair, and Overhaul (MRO) Services for Heat Transfer Components and OEM of Heat Transfer Solutions; MRO Services for Aviation Components; and Overhaul and Coating of Jet Engine Components. It designs, develops, and manufactures a range of heat transfer solutions, such as pre-cooler and oil/fuel hydraulic heat exchangers used in mechanical and electronic systems in commercial, military, and business aircraft; environmental control and power electronics cooling systems for use in aircraft and ground applications; and a range of other mechanical aircraft accessories and systems, such as pumps, valves, and turbine power units. The company provides MRO services for heat transfer components, as well as for manufacturing heat transfer solutions; and aviation components. In addition, it engages in the operation of a repair station, which provides heat transfer MRO services for airlines, air cargo carriers, maintenance service centers, and the military; and the overhaul and coating of jet engine components, including turbine vanes and blades, fan blades, variable inlet guide vanes, and afterburner flaps. The company was formerly known as Galagraph Ltd. and changed its name to TAT Technologies Ltd. in May 1992. TAT Technologies Ltd. was founded in 1969 and is headquartered in Netanya, Israel.