Critical Analysis: TAT Technologies (NASDAQ:TATT) & Park Aerospace (NYSE:PKE)

TAT Technologies (NASDAQ:TATT) and Park Aerospace (NYSE:PKE) are both small-cap aerospace companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, profitability, dividends, valuation, earnings, risk and analyst recommendations.

Institutional & Insider Ownership

15.1% of TAT Technologies shares are held by institutional investors. Comparatively, 77.8% of Park Aerospace shares are held by institutional investors. 8.8% of TAT Technologies shares are held by insiders. Comparatively, 11.3% of Park Aerospace shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations for TAT Technologies and Park Aerospace, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TAT Technologies	1	0	5	3	3.11
Park Aerospace	0	0	1	0	3.00

TAT Technologies currently has a consensus price target of $57.29, suggesting a potential upside of 54.53%. Given TAT Technologies’ stronger consensus rating and higher probable upside, research analysts plainly believe TAT Technologies is more favorable than Park Aerospace.

Dividends

TAT Technologies pays an annual dividend of $0.34 per share and has a dividend yield of 0.9%. Park Aerospace pays an annual dividend of $0.50 per share and has a dividend yield of 1.4%. TAT Technologies pays out 26.4% of its earnings in the form of a dividend. Park Aerospace pays out 116.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Volatility and Risk

TAT Technologies has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500. Comparatively, Park Aerospace has a beta of 0.45, meaning that its share price is 55% less volatile than the S&P 500.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TAT Technologies	$177.02 million	2.72	$16.82 million	$1.29	28.74
Park Aerospace	$62.03 million	11.10	$5.88 million	$0.43	80.37

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

Profitability

This table compares TAT Technologies and Park Aerospace’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TAT Technologies	9.27%	9.47%	7.31%
Park Aerospace	13.14%	9.28%	8.25%

Summary

TAT Technologies beats Park Aerospace on 10 of the 17 factors compared between the two stocks.

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.

About Park Aerospace

Park Aerospace Corp., an aerospace company, develops and manufactures solution and hot-melt advanced composite materials used to produce composite structures for the aerospace market in North America, Asia, and Europe. It offers advanced composite materials, including film adhesives and lightning strike protection materials that are used to produce primary and secondary structures for jet engines, large and regional transport aircrafts, military aircrafts, unmanned aerial vehicles, business jets, general aviation aircrafts, and rotary wing aircrafts. The company also provides specialty ablative materials for rocket motors and nozzles; and specially designed materials for radome applications. In addition, it designs and fabricates composite parts, structures and assemblies, and low volume tooling for the aerospace industry. The company was formerly known as Park Electrochemical Corp. and changed its name to Park Aerospace Corp. in July 2019. Park Aerospace Corp. was incorporated in 1954 and is based in Westbury, New York.