Raytheon (NYSE: RTN) and Exelis (NYSE:XLS) are both aerospace companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, institutional ownership, profitability, dividends, valuation, analyst recommendations and earnings.
Insider & Institutional Ownership
73.4% of Raytheon shares are owned by institutional investors. 0.2% of Raytheon shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Valuation & Earnings
This table compares Raytheon and Exelis’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Raytheon||$25.35 billion||2.40||$2.02 billion||$6.95||30.32|
Raytheon has higher revenue and earnings than Exelis. Exelis is trading at a lower price-to-earnings ratio than Raytheon, indicating that it is currently the more affordable of the two stocks.
Raytheon pays an annual dividend of $3.19 per share and has a dividend yield of 1.5%. Exelis does not pay a dividend. Raytheon pays out 45.9% of its earnings in the form of a dividend. Exelis has increased its dividend for 13 consecutive years.
This table compares Raytheon and Exelis’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of recent ratings and price targets for Raytheon and Exelis, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Raytheon presently has a consensus price target of $215.73, suggesting a potential upside of 2.36%. Given Raytheon’s higher possible upside, research analysts plainly believe Raytheon is more favorable than Exelis.
Raytheon beats Exelis on 11 of the 13 factors compared between the two stocks.
Raytheon Company Profile
Raytheon Company is a technology company, which specializes in defense and other government markets. The Company develops integrated products, services and solutions in various markets, including sensing; effects; command, control, communications, computers, cyber and intelligence; mission support, and cybersecurity. The Company operates through five segments: Integrated Defense Systems (IDS); Intelligence, Information and Services (IIS); Missile Systems (MS); Space and Airborne Systems (SAS), and Forcepoint. The IDS segment develops and produces sensors and mission systems. The IIS segment provides a range of technical and professional services to intelligence, defense, federal and commercial customers. The MS segment is a developer, integrator and producer of missile and combat systems. The SAS segment is engaged in the design, development and manufacture of integrated sensor and communication systems for missions. The Forcepoint segment develops cybersecurity products.
Exelis Company Profile
Exelis Inc. (Exelis) is a diversified aerospace, defense, information and services company. The Company delivers mission-critical solutions to military, government and commercial customers in the United States and globally. It operates in two segments: Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance (C4ISR) Electronics and Systems, and Information and Technical Services. Its C4ISR Electronics and Systems segment provides engineered systems and solutions, including: ISR systems; integrated electronic warfare systems; radar and sonar systems; electronic attack and release systems; communications solutions; space systems, and composite aerostructures. The Company’s Information and Technical Services segment provides a range of service solutions: systems integration; network design and development; air traffic management; cyber; intelligence; advanced engineering, and space launch and range-support.
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