Contrasting Willis Lease Finance (NASDAQ:WLFC) and Aercap (NYSE:AER)

Willis Lease Finance (NASDAQ:WLFC) and Aercap (NYSE:AER) are both transportation companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, valuation, earnings, institutional ownership, analyst recommendations and dividends.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Willis Lease Finance and Aercap, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Willis Lease Finance	0	0	0	0	0.00
Aercap	1	1	7	0	2.67

Aercap has a consensus price target of $119.25, indicating a potential upside of 4.06%. Given Aercap’s stronger consensus rating and higher possible upside, analysts clearly believe Aercap is more favorable than Willis Lease Finance.

Valuation and Earnings

This table compares Willis Lease Finance and Aercap”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Willis Lease Finance	$607.87 million	1.76	$108.61 million	$14.60	9.53
Aercap	$8.00 billion	2.68	$2.10 billion	$11.27	10.17

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

Insider & Institutional Ownership

93.7% of Willis Lease Finance shares are held by institutional investors. Comparatively, 96.4% of Aercap shares are held by institutional investors. 53.8% of Willis Lease Finance shares are held by company insiders. Comparatively, 0.5% of Aercap shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

Willis Lease Finance pays an annual dividend of $1.00 per share and has a dividend yield of 0.7%. Aercap pays an annual dividend of $1.08 per share and has a dividend yield of 0.9%. Willis Lease Finance pays out 6.8% of its earnings in the form of a dividend. Aercap pays out 9.6% 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. Aercap has increased its dividend for 2 consecutive years. Aercap is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Willis Lease Finance has a beta of 1.05, meaning that its stock price is 5% more volatile than the S&P 500. Comparatively, Aercap has a beta of 1.39, meaning that its stock price is 39% more volatile than the S&P 500.

Profitability

This table compares Willis Lease Finance and Aercap’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Willis Lease Finance	17.21%	19.69%	3.34%
Aercap	26.53%	13.84%	3.26%

Summary

Aercap beats Willis Lease Finance on 12 of the 17 factors compared between the two stocks.

About Willis Lease Finance

Willis Lease Finance Corporation operates as a lessor and servicer of commercial aircraft and aircraft engines worldwide. The company operates through two segments, Leasing and Related Operations, and Spare Parts Sales. The Leasing and Related Operations segment engages in acquiring and leasing commercial aircraft, aircraft engines, and other aircraft equipment, as well as the purchase and resale of commercial aircraft engines and other aircraft equipment, and other related businesses. The Spare Parts Sales segment purchases and resells after-market engine parts, whole engines, engine modules, and portable aircraft components. The company also focuses on engine management and consulting business. It serves commercial aircraft operators, as well as maintenance, repair, and overhaul organizations. As of December 31, 2023, it had a total lease portfolio of 337 engines, 12 aircraft, one marine vessel, and other leased parts and equipment, and with 74 lessees in 42 countries; and managed a total lease portfolio of 198 engines, aircraft, and related equipment for other parties. The company was founded in 1985 and is headquartered in Coconut Creek, Florida.

About Aercap

AerCap Holdings N.V. engages in the lease, financing, sale, and management of commercial flight equipment in China, Hong Kong, Macau, the United States, Ireland, and internationally. The company offers aircraft asset management services, such as remarketing aircraft and engines; collecting rental and maintenance rent payments, monitoring aircraft maintenance, monitoring and enforcing contract compliance, and accepting delivery and redelivery of aircraft and engines; and conducting ongoing lessee financial performance reviews. Its aircraft asset management services also include periodically inspecting the leased aircraft and engines; coordinating technical modifications to aircraft to meet new lessee requirements; conducting restructuring negotiations in connection with lease defaults; repossessing aircraft and engines; arranging and monitoring insurance coverage; registering and de-registering aircraft; arranging for aircraft and engine valuations; and providing market research services. In addition, the company provides cash management services, including treasury services, such as the financing, refinancing, hedging, and ongoing cash management of vehicles; and administrative services comprising accounting and corporate secretarial services consisting of the preparation of budgets and financial statements. Further, it offers airframe and engine parts and supply chain solutions to airlines; maintenance, repair, and overhaul service providers; and aircraft parts distributors. The company had a portfolio of owned, managed, or on order aircraft. AerCap Holdings N.V. was founded in 1995 and is headquartered in Dublin, Ireland.