CAE (NYSE:CAE) vs. Thales (OTCMKTS:THLEF) Head-To-Head Analysis

CAE (NYSE:CAE) and Thales (OTCMKTS:THLEF) are both industrials companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for CAE and Thales, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CAE	1	6	1	0	2.00
Thales	0	0	0	0	N/A

CAE currently has a consensus price target of $28.00, suggesting a potential upside of 47.37%. Given CAE’s higher probable upside, equities research analysts plainly believe CAE is more favorable than Thales.

Dividends

CAE pays an annual dividend of $0.33 per share and has a dividend yield of 1.7%. Thales pays an annual dividend of $1.12 per share and has a dividend yield of 0.7%. CAE pays out -45.7% of its earnings in the form of a dividend. Thales pays out 27.6% 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. CAE is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares CAE and Thales’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CAE	-7.38%	5.96%	2.64%
Thales	N/A	N/A	N/A

Insider and Institutional Ownership

67.4% of CAE shares are owned by institutional investors. Comparatively, 20.8% of Thales shares are owned by institutional investors. 18.3% of CAE shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares CAE and Thales”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CAE	$4.34 billion	1.40	-$225.35 million	($0.72)	-26.39
Thales	N/A	N/A	N/A	$4.07	39.01

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

Summary

CAE beats Thales on 9 of the 12 factors compared between the two stocks.

About CAE

CAE Inc., together with its subsidiaries, provides simulation training and critical operations support solutions in Canada, the United States, the United Kingdom, Europe, Asia, the Oceania, Africa, and Rest of the Americas. It operates through two segments, Civil Aviation; and Defense and Security. The Civil Aviation segment offers training solutions for flight, cabin, maintenance, and ground personnel in commercial, business, and helicopter aviation; a range of flight simulation training devices; and ab initio pilot training and crew sourcing services, as well as aircraft flight operations solutions. The Defense and Security segment operates as a training and simulation provider that delivers platform-independent solutions to enable and enhance force readiness and security for defense forces, original equipment manufacturers (OEMs), government agencies, and public safety organizations. The company was formerly known as CAE Industries Ltd. and changed its name to CAE Inc. in 1993. CAE Inc. was incorporated in 1947 and is headquartered in Saint-Laurent, Canada.

About Thales

Thales S.A. provides various solutions in the defence and security, aerospace and space, digital identity and security, and transport markets worldwide. It operates through Aerospace, Defence & Security, Digital Identity & Security, and Ground Transportation Systems business segments. The company offers communications, command, and control systems; mission services and support; protection and mission/combat systems; surveillance, detection, and intelligence systems; training and simulation solutions for air, land, naval, and joint forces; and digital identity and security solutions. It also provides air traffic management solutions; flight decks and avionics equipment and functions; in-flight entertainment, connectivity, and services; drone solutions; aerospace trading solutions; navigation solutions; support and services for civil aviation; and connectivity solutions. In addition, the company designs, operates, and delivers satellite-based systems for telecommunications, navigation, earth observation, environmental management, exploration, and science and orbital infrastructures; signaling, communications and supervision, and fare collection management systems and related services; cybersecurity and railway digitalization systems; and main line rail, and urban and intermodal mobility solutions. Further, it provides solutions for various markets and applications, including radiology, radio frequency, microwave sources, training and simulation solutions, lasers, and microelectronics solutions for science, industry, space, defense, automotive, railways, and energy conversion platforms. The company was formerly known as Thomson-CSF and changed its name to Thales S.A. in 2000. Thales S.A. was founded in 1893 and is headquartered in Meudon, France.