Hidden Real Estate Value in Gencorp Inc (GY)

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Peer Comparison

Compared to its peers, including Alliant Techsystems Inc. (NYSE:ATK) and United Technologies, Gencorp had the lowest operating margin at 4%, while the operating margins of Alliant and United Technologies were 10% and 14%, respectively. However, Gencorp is the most expensively valued at 13.6x EV/EBITDA. Alliant had the cheapest valuation among the three, at 5x EV/EBITDA, whereas United Technologies is valued at 10.38x EV multiples.

GY ATK UTX
Operating margin (%) 4 10 14
EV/EBITDA 13.62 5 10.38
Dividend yield N/A 1.6 2.4

United Technologies is paying the highest dividend yield of 2.4%, while Alliant is paying a 1.6% dividend yield. Currently, Gencorp is not paying any dividend.

Foolish Bottom Line

I think Gencorp is an attractive real estate play with its 12,200 acres in Sacramento Metropolitan. However, it would take some time for the company to fully unlock its potential real estate value. Personally, I think Gencorp could fit well in long-term portfolios of patient investors.

The article Hidden Real Estate Value in Gencorp originally appeared on Fool.com and is written by Anh HOANG.

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