Analyzing Loar (NYSE:LOAR) and Optex Systems (NASDAQ:OPXS)

Optex Systems (NASDAQ:OPXS) and Loar (NYSE:LOAR) are both aerospace companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, analyst recommendations, valuation, profitability, earnings and risk.

Earnings & Valuation

This table compares Optex Systems and Loar”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Optex Systems	$39.48 million	2.64	$3.77 million	$0.75	20.12
Loar	$402.82 million	17.32	$22.23 million	$0.46	161.97

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

Risk and Volatility

Optex Systems has a beta of 0.45, suggesting that its stock price is 55% less volatile than the S&P 500. Comparatively, Loar has a beta of 0.19, suggesting that its stock price is 81% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Optex Systems and Loar, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Optex Systems	0	0	1	0	3.00
Loar	0	1	3	1	3.00

Loar has a consensus target price of $97.00, suggesting a potential upside of 30.19%. Given Loar’s higher probable upside, analysts clearly believe Loar is more favorable than Optex Systems.

Profitability

This table compares Optex Systems and Loar’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Optex Systems	13.01%	24.67%	19.20%
Loar	9.82%	5.50%	3.82%

Institutional and Insider Ownership

19.1% of Optex Systems shares are held by institutional investors. 30.3% of Optex Systems shares are held by company insiders. Comparatively, 22.6% of Loar shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

About Optex Systems

Optex Systems Holdings, Inc manufactures and sells optical sighting systems and assemblies primarily for the U.S. department of defense, foreign military applications, and commercial markets in the United States. It offers periscopes, such as laser and non-laser protected plastic and glass periscopes, electronic M17 day/thermal periscopes, and vision blocks; sighting systems, including back up sights, digital day and night sighting systems, M36 thermal periscope, unity mirrors, optical weapon system support and maintenance, commander weapon station sights, and sight assembly refurbishments; howitzers comprising M137 telescope, M187 mount, M119 aiming device, XM10 and aiming circles; and applied optics center consisting of laser interference filter, optical assemblies, laser filter units, day windows, and specialty thin film coatings, as well as other products, such as muzzle reference systems, binoculars, collimators, optical lenses and elements, and windows. The company also provides various periscope configurations, rifle and surveillance sights, and night vision optical assemblies. Its products are installed on various types of U.S. military land vehicles, such as the Abrams, Bradley, and Stryker families of fighting vehicles, as well as light armored and armored security vehicles. The company offers its products directly to the federal government, prime contractors, and foreign governments. Optex Systems Holdings, Inc was founded in 1987 and is headquartered in Richardson, Texas. Optex Systems Holdings, Inc is a subsidiary of Sileas Corporation.

About Loar

Loar Holdings Inc., through its subsidiaries, designs, manufactures, and markets aerospace and defense components for aircraft, and aerospace and defense systems in the United States and internationally. It offers products in various categories, which include airframe components, structural components, avionics, composites, braking system components, de-ice and ice protection, electro-mechanical, engineered materials, flight controls, fluid and motion controls, environmental, metal forming, molded components, and restraints and safety devices. The company also provides auto throttles, lap-belt airbags, two-and three-point seat belts, water purification systems, fire barriers, polyimide washers and bushings, latches, hold-open and tie rods, temperature and fluid sensors and switches, carbon and metallic brake discs, fluid and pneumatic-based ice protection, RAM air components, sealing solutions, actuation devices, and others. It primarily serves commercial, business jet and general aviation, and defense markets. Loar Holdings Inc. was founded in 2017 and is headquartered in White Plains, New York.