CAE Inc. (TSX:CAE)(NYSE:CAE), one of the world’s leading providers of comprehensive training solutions for the aviation, defense, security, and healthcare industries, announced fourth-quarter earnings results on the morning of May 26, and its stock has responded by falling over 1.5% in the trading sessions since. Let’s break down the results to determine if we should consider using this weakness as a long-term buying opportunity, or if we should look elsewhere for an investment instead.

Increased demand leads to record revenues

Here’s a summary of CAE’s fourth-quarter earnings results compared with its results in the same period a year ago. All results are from continuing operations.

Metric Q4 2015 Q4 2014
Earnings Per Share $0.24 $0.23
Revenue $631.6 million $575.7 million

Source: CAE Inc.

CAE’s earnings per share increased 4.3% and its revenue increased 9.7% compared with the fourth quarter of fiscal 2014. The company’s solid earnings-per-share growth can be attributed to its net income increasing 5.7% to $63.3 million, helped by its total costs of sales increasing just 8.2% to $449.6 million.

Its very strong revenue growth can be attributed to its revenues increasing in all three of its major segments, including 13.6% growth to $367.6 million in its Civil Aviation Training Solutions segment, 1.9% growth to $234.7 million in its Defense & Security segment, and 33.8% growth to $29.3 million in its Healthcare segment.

Here’s a quick breakdown of six other notable statistics from the report compared with the year-ago period:

  1. Gross profit increased 13.8% to $182 million
  2. Gross margin expanded 100 basis points to 28.8%
  3. Operating profit increased 21.6% to $105.4 million
  4. Operating margin expanded 160 basis points to 16.7%
  5. Free cash flow increased 31.3% to $142.2 million
  6. Total backlog increased 7% to a record $5.36 billion

CAE also announced that it will be maintaining its quarterly dividend of $0.07 per share, and the next payment will come on June 30 to shareholders of record at the close of business on June 15.

Should you add CAE to your portfolio today?

The fourth quarter was one for the record books for CAE, so I do not think the post-earnings weakness in its stock is warranted. With this being said, I think investors should use this as a long-term buying opportunity because the stock trades at low forward valuations, and because the company has shown a strong dedication to maximizing shareholder value through the payment of dividends.

First, CAE’s stock trades at just 17.5 times fiscal 2015’s estimated earnings per share of $0.86 and only 15.7 times fiscal 2016’s estimated earnings per share of $0.96, both of which are inexpensive compared with its long-term growth potential. I think CAE’s stock could consistently command a fair multiple of at least 20, which would place its shares upwards of $17 by the conclusion of fiscal 2015 and upwards of $19 by the conclusion of fiscal 2016, representing upside of more than 12% and 26%, respectively, from today’s levels.

Second, CAE pays an annual dividend of $0.28 per share, giving its stock a 1.85% yield at current levels. A 1.85% yield may not impress you at first, but it is very important to note that the company has increased its annual dividend payment for seven consecutive years, and its increased amount of free cash flow could allow this streak to continue for the next several years.

With all of the information provided above in mind, I think CAE Inc. represents one of the best long-term investment opportunities in the Aerospace industry today. Foolish investors should take a closer look and strongly consider beginning to scale in to positions.

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Fool contributor Joseph Solitro has no position in any stocks mentioned.