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AAR Corp. (AIR) vs VSE Corporation (VSEC)

AAR Corp. and VSE Corporation are both Aerospace & Defense companies. VSE Corporation is the larger, with a market value of $4.6B against $4.2B — 1.1× the size. AAR Corp. trades at the lower P/E: 21.2× against 60.0×. VSE Corporation grew revenue faster over the last twelve months: 41.6% against 22.0%. AAR Corp. has the higher net margin (5.55% vs 5.53%) and the higher return on invested capital (7.10% vs 2.04%). Across the 21 metrics below, AAR Corp. leads on 15 and VSE Corporation on 6.

Valuation

Metric AIR VSEC Aerospace & Defense median
P/E 21.23 59.96 28.48
P/S 1.19 3.78 2.95
P/B 2.37 1.75 2.68
Price to free cash flow 22.38 n/m 31.70
EV/EBITDA 13.42 32.83 16.85
EV/Sales 1.41 4.43 2.74
Earnings yield 4.71% 1.67% 0.89%
Free cash flow yield 4.47% (0.02%) 0.00%

Profitability

Metric AIR VSEC Aerospace & Defense median
Gross margin 19.06% 15.62% 26.41%
Operating margin 8.17% 9.15% 3.69%
Net margin 5.55% 5.53% 2.74%
Free cash flow margin 5.30% (0.08%) 0.00%
Return on equity 12.93% 3.84% 4.44%
Return on assets 6.09% 2.50% 1.90%
Return on invested capital 7.10% 2.04% 0.26%

Growth

Metric AIR VSEC Aerospace & Defense median
Revenue growth (TTM) 21.97% 41.55% 18.03%
EPS growth (last fiscal year) 1,288.57% (35.29%) 24.80%
Revenue growth, 5-year CAGR 14.89% 10.95% 9.73%
Net income growth, 5-year CAGR 39.60% 0.00% 0.00%

Health

Metric AIR VSEC Aerospace & Defense median
Debt to equity 0.50 0.32 0.20
Current ratio 2.83 3.77 2.85
Net debt to EBITDA 2.23 1.71 1.29

Dividend

Metric AIR VSEC Aerospace & Defense median
Dividend yield — 0.24% 0.91%
Payout ratio — 0.15 0.30

Size

Metric AIR VSEC Aerospace & Defense median
Market cap 4.20b 4.62b 1.78b

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