Reviewing General Dynamics (NYSE:GD) & Innovative Solutions and Support (NASDAQ:ISSC)

General Dynamics (NYSE:GD) and Innovative Solutions and Support (NASDAQ:ISSC) are both industrials companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, dividends, valuation and institutional ownership.

Dividends

General Dynamics pays an annual dividend of $6.36 per share and has a dividend yield of 1.9%. Innovative Solutions and Support pays an annual dividend of $2.00 per share and has a dividend yield of 10.3%. General Dynamics pays out 38.8% of its earnings in the form of a dividend. Innovative Solutions and Support pays out 190.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. General Dynamics has increased its dividend for 34 consecutive years.

Earnings & Valuation

This table compares General Dynamics and Innovative Solutions and Support”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
General Dynamics	$52.55 billion	1.77	$4.21 billion	$16.39	20.92
Innovative Solutions and Support	$93.15 million	3.72	$15.63 million	$1.05	18.43

General Dynamics has higher revenue and earnings than Innovative Solutions and Support. Innovative Solutions and Support is trading at a lower price-to-earnings ratio than General Dynamics, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and price targets for General Dynamics and Innovative Solutions and Support, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
General Dynamics	1	5	12	1	2.68
Innovative Solutions and Support	0	2	1	2	3.00

General Dynamics presently has a consensus price target of $402.32, suggesting a potential upside of 17.32%. Innovative Solutions and Support has a consensus price target of $16.25, suggesting a potential downside of 16.02%. Given General Dynamics’ higher possible upside, equities research analysts clearly believe General Dynamics is more favorable than Innovative Solutions and Support.

Profitability

This table compares General Dynamics and Innovative Solutions and Support’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
General Dynamics	8.18%	17.43%	7.67%
Innovative Solutions and Support	20.50%	30.53%	17.28%

Institutional and Insider Ownership

86.1% of General Dynamics shares are owned by institutional investors. Comparatively, 28.5% of Innovative Solutions and Support shares are owned by institutional investors. 1.4% of General Dynamics shares are owned by company insiders. Comparatively, 5.9% of Innovative Solutions and Support shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

General Dynamics has a beta of 0.33, indicating that its share price is 67% less volatile than the S&P 500. Comparatively, Innovative Solutions and Support has a beta of 0.59, indicating that its share price is 41% less volatile than the S&P 500.

About General Dynamics

General Dynamics Corporation operates as an aerospace and defense company worldwide. It operates through four segments: Aerospace, Marine Systems, Combat Systems, and Technologies. The Aerospace segment produces and sells business jets; and offers aircraft maintenance and repair, management, aircraft-on-ground support and completion, charter, staffing, and fixed-base operator services. The Marine Systems segment designs and builds nuclear-powered submarines, surface combatants, and auxiliary ships for the United States Navy and Jones Act ships for commercial customers, as well as builds crude oil and product tankers, and container and cargo ships; provides maintenance, modernization, and lifecycle support services for navy ships; offers and program management, planning, engineering, and design support services for submarine construction programs. The Combat Systems segment manufactures land combat solutions, such as wheeled and tracked combat vehicles, Stryker wheeled combat vehicles, piranha vehicles, weapons systems, munitions, mobile bridge systems with payloads, tactical vehicles, main battle tanks, armored vehicles, and armaments; and offers modernization programs, engineering, support, and sustainment services. The Technologies segment provides information technology solutions and mission support services; mobile communication, computers, and command-and-control mission systems; intelligence, surveillance, and reconnaissance solutions to military, intelligence, and federal civilian customers; cloud computing, artificial intelligence; machine learning; big data analytics; development, security, and operations; and unmanned undersea vehicle manufacturing and assembly services. The company was founded in 1899 and is headquartered in Reston, Virginia.

About Innovative Solutions and Support

Innovative Solutions and Support, Inc., a systems integrator, designs, develops, manufactures, sells, and services flight guidance, autothrottles, and cockpit display systems in the United States and internationally. It offers flat panel display systems that replicate the display of analog or digital displays on one screen and replace existing displays in legacy aircraft, as well as used for security monitoring on-board aircraft and as tactical workstations on military aircraft; and flight deck management system, a navigation and performance computer that upgrade for commercial air transport aircraft. The company also provides integrated standby units, which incorporate the measurement and display of attitude, altitude, airspeed, and navigation data into a single backup navigation instrument for military, commercial air transport, and corporate/general aviation applications. In addition, it offers digital air data computers that calculate various air data parameters, such as altitude, airspeed, vertical speed, angle of attack, and other information; integrated air data computers and display units, which calculate and convey air data information; altitude displays that convey aircraft altitude measurements; airspeed displays that convey various airspeed measurements; and altitude alerters. Further, the company offers the engine and fuel displays that convey information related to fuel and oil levels, and engine activity, including oil and hydraulic pressure and temperature; integrated global navigation systems; ThrustSense, a full regime autothrottle; and utility management systems. It serves commercial air transport carriers and corporate/general aviation companies, the Department of Defense and its commercial contractors, aircraft operators, aircraft modification centers, government agencies, and foreign militaries, as well as original equipment manufacturers. Innovative Solutions and Support, Inc. was incorporated in 1988 and is based in Exton, Pennsylvania.