Q: Would you please compare financial metrics for Efn and Cae and which would you recommend for a 2 to 3 year hold and reasoning. Thank you.
5i Research Answer:
EFN is 15x earnings, with a 1.94% dividend and expected EPS growth this year of more than 100% (from depressed levels in 2025). Market cap $12.2B.
CAE is 32x earnings, no dividend, growth lower in the 10% range after a solid 2025. It has a large backlog.
Both have their attractions and risks. Both are down this year (CAE less).
We would side with CAE, largely due to its big backlog and connection to the defense sector, which will likely do better than 'cars' (fleet management) of EFN. The valuation makes this more difficult, but if we enter a period of economic weakness then CAE likely will manage things better due to the backlog and the inherent nature of its business.