Comparing CAE (CAE) and Tarena International (TEDU)

CAE (NYSE: CAE) and Tarena International (NASDAQ:TEDU) are both aerospace companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, profitabiliy, risk, valuation, earnings, institutional ownership and dividends.

Risk and Volatility

CAE has a beta of 0.86, meaning that its share price is 14% less volatile than the S&P 500. Comparatively, Tarena International has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500.

Institutional and Insider Ownership

56.7% of CAE shares are owned by institutional investors. Comparatively, 35.6% of Tarena International shares are owned by institutional investors. 18.3% of CAE shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares CAE and Tarena International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CAE 9.30% 13.96% 5.39%
Tarena International 14.79% 15.89% 11.60%

Dividends

CAE pays an annual dividend of $0.24 per share and has a dividend yield of 1.4%. Tarena International pays an annual dividend of $0.14 per share and has a dividend yield of 0.7%. CAE pays out 33.8% of its earnings in the form of a dividend. Tarena International pays out 23.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Analyst Recommendations

This is a breakdown of current ratings and price targets for CAE and Tarena International, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CAE 0 6 2 0 2.25
Tarena International 0 1 2 0 2.67

CAE currently has a consensus target price of $19.17, suggesting a potential upside of 10.15%. Tarena International has a consensus target price of $17.80, suggesting a potential downside of 10.78%. Given CAE’s higher possible upside, analysts clearly believe CAE is more favorable than Tarena International.

Earnings and Valuation

This table compares CAE and Tarena International’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
CAE $2.14 billion 2.18 $400.94 million $0.71 24.51
Tarena International $243.69 million 4.61 $43.40 million $0.61 32.70

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

Summary

Tarena International beats CAE on 8 of the 15 factors compared between the two stocks.

About CAE

CAE Inc. provides training for the civil aviation, defense and security, and healthcare markets. The Company designs and integrates training solutions. It operates through three segments: Civil Aviation Training Solutions, Defense and Security, and Healthcare. The Company provides training solutions for flight, cabin, maintenance and ground personnel in commercial, business and helicopter aviation, a range of flight simulation training devices, as well as ab initio pilot training and crew sourcing services. The Company is a training systems integrator for defense forces across the air, land and sea domains, and for government and civil security organizations responsible for public safety. The Company designs, manufactures and markets simulators, simulation center management solutions and courseware for training of medical and allied healthcare students and clinicians in educational institutions, hospitals and defense organizations across the world.

About Tarena International

Tarena International, Inc. (Tarena International) is a holding company. The Company, through its subsidiaries, provides professional education services, including professional information technology (IT) training courses and non-IT training courses across the People’s Republic of China (PRC). It operates through training segment. It offers courses in over 10 IT subjects and approximately three non-IT subjects, and over two kid education programs. It offers an education platform that combines live distance instruction, classroom-based tutoring and online learning modules. It complements the live instruction and tutoring with its learning management system, Tarena Teaching System (TTS). TTS has over five core functions, featuring course content, self-assessment exams, student and teaching staff interaction tools, student management tools and an online student community. In addition, the Company offers Tongcheng and Tongmei featuring IT training courses and non-IT training courses.

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