Head-To-Head Survey: Rockwell Collins (COL) vs. TransDigm Group (TDG)

Rockwell Collins (NYSE: COL) and TransDigm Group (NYSE:TDG) are both large-cap aerospace companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, dividends, profitability, risk and valuation.

Volatility & Risk

Rockwell Collins has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500. Comparatively, TransDigm Group has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500.



Profitability

This table compares Rockwell Collins and TransDigm Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rockwell Collins 10.99% 19.58% 6.43%
TransDigm Group 18.95% -27.70% 6.47%

Dividends

Rockwell Collins pays an annual dividend of $1.32 per share and has a dividend yield of 1.0%. TransDigm Group does not pay a dividend. Rockwell Collins pays out 21.5% of its earnings in the form of a dividend.

Insider and Institutional Ownership

67.7% of Rockwell Collins shares are owned by institutional investors. 1.1% of Rockwell Collins shares are owned by company insiders. Comparatively, 10.5% of TransDigm Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations for Rockwell Collins and TransDigm Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rockwell Collins 1 16 3 0 2.10
TransDigm Group 1 4 10 0 2.60

Rockwell Collins presently has a consensus target price of $130.00, indicating a potential downside of 2.93%. TransDigm Group has a consensus target price of $325.15, indicating a potential upside of 5.38%. Given TransDigm Group’s stronger consensus rating and higher possible upside, analysts clearly believe TransDigm Group is more favorable than Rockwell Collins.

Earnings and Valuation

This table compares Rockwell Collins and TransDigm Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rockwell Collins $6.82 billion 3.22 $705.00 million $6.15 21.78
TransDigm Group $3.50 billion 4.60 $596.88 million $12.01 25.69

Rockwell Collins has higher revenue and earnings than TransDigm Group. Rockwell Collins is trading at a lower price-to-earnings ratio than TransDigm Group, indicating that it is currently the more affordable of the two stocks.

Summary

TransDigm Group beats Rockwell Collins on 11 of the 16 factors compared between the two stocks.

About Rockwell Collins

Rockwell Collins, Inc. designs, produces, and supports communications and aviation systems worldwide. The company's Interior Systems segment offers commercial aircraft seats; galley structures, food and beverage preparation equipment, and water and waste systems; oxygen and passenger service equipment; cabin lighting systems; and business jet and general aviation interior products. Its Commercial Systems segment provides cabin management systems; data link, frequency, very high frequency, and satellite communications systems; landing, radio navigation, and geophysical sensors, and flight management systems; situational awareness and surveillance systems and products; integrated flight controls; simulation and training systems; maintenance, repair, parts, and after-sales support services, and aftermarket used equipment. The company's Government Systems segment provides communications systems and products; radio navigation products, global positioning system equipment, and multi-mode receivers; avionics systems; precision targeting, electronic warfare, and training systems; simulation and training systems; space wheels; visual system products; maintenance, repair, parts, and after-sales support services, and aftermarket used equipment. Its Information Management Services segment offers voice and data communication services; flight support services; airport communications and information systems; train dispatching and information systems; mission critical security systems; and cabin connectivity solutions. The company serves original equipment manufacturers of commercial air transport, business and regional aircraft, commercial airlines, U.S. Department of Defense, other ministries of defense, other government agencies, defense contractors, the U.S. Federal Aviation Administration, and passenger and freight railroads, as well as airport, critical infrastructure, and business aircraft operators. The company was founded in 1933 and is headquartered in Cedar Rapids, Iowa.

About TransDigm Group

TransDigm Group Incorporated designs, produces, and supplies aircraft components in the United States. The company's Power & Control segment offers mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, specialized pumps and valves, power conditioning devices, specialized AC/DC electric motors and generators, databus and power controls, hoists, winches and lifting devices, and cargo loading and handling systems. It serves engine and power system and subsystem suppliers, airlines, third party maintenance suppliers, military buying agencies, and repair depots. The Airframe segment provides engineered latching and locking devices, rods and locking devices, engineered connectors and elastomers, cockpit security components and systems, aircraft audio systems, specialized lavatory components, seat belts and safety restraints, engineered interior surfaces and related components, lighting and control technology, military personnel parachutes, and cargo delivery systems. It serves manufacturers, cabin system and subsystem suppliers, airlines, third party maintenance suppliers, military buying agencies, and repair depots. The Non-aviation segment offers seat belts and safety restraints for ground transportation applications; mechanical/electro-mechanical actuators and controls for space applications; and refueling systems for heavy equipment. It serves off-road vehicle and subsystem suppliers, child restraint system suppliers, and satellite and space system suppliers; and manufacturers of heavy equipment. The company also offers aerospace pneumatic and hydraulic components and subsystems for commercial transport, regional, business jet, and military applications; extruded plastic interior parts for use in the commercial aerospace industry; faucets and related products for use on commercial transports and regional jets; and unit load devices. TransDigm Group Incorporated was founded in 1993 and is headquartered in Cleveland, Ohio.

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