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 $4.5B against $3.9B — 1.1× the size. AAR Corp. trades at the lower P/E: 20.1× against 51.8×. 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 20.08 51.83 31.81
P/S 1.12 3.72 3.55
P/B 2.25 1.72 2.59
Price to free cash flow 21.18 n/m 31.99
EV/EBITDA 12.81 32.36 18.08
EV/Sales 1.34 4.36 3.37
Earnings yield 4.98% 1.93% 1.38%
Free cash flow yield 4.72% (0.02%) 0.21%

Profitability

Metric AIR VSEC Aerospace & Defense median
Gross margin 19.06% 15.62% 25.48%
Operating margin 8.17% 9.15% 4.54%
Net margin 5.55% 5.53% 2.22%
Free cash flow margin 5.30% (0.08%) 1.43%
Return on equity 12.93% 3.84% 6.43%
Return on assets 6.09% 2.50% 2.70%
Return on invested capital 7.10% 2.04% 1.56%

Growth

Metric AIR VSEC Aerospace & Defense median
Revenue growth (TTM) 21.97% 41.55% 18.43%
EPS growth (last fiscal year) 1,288.57% 24.14% 24.27%
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 0.24
Current ratio 2.83 3.77 2.72
Net debt to EBITDA 2.23 1.71 1.12

Dividend

Metric AIR VSEC Aerospace & Defense median
Dividend yield — 0.24% 0.90%
Payout ratio — 0.13 0.32

Size

Metric AIR VSEC Aerospace & Defense median
Market cap 3.94b 4.53b 2.19b

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