Orbital ATK (NYSE: OA) and Rockwell Collins (NYSE:COL) are both mid-cap aerospace companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, risk, analyst recommendations, dividends, institutional ownership and profitabiliy.

Analyst Ratings

This is a breakdown of recent ratings for Orbital ATK and Rockwell Collins, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Orbital ATK 0 2 8 0 2.80
Rockwell Collins 1 8 11 0 2.50

Orbital ATK currently has a consensus target price of $103.53, indicating a potential downside of 2.76%. Rockwell Collins has a consensus target price of $114.18, indicating a potential downside of 10.15%. Given Orbital ATK’s stronger consensus rating and higher probable upside, analysts plainly believe Orbital ATK is more favorable than Rockwell Collins.

Insider and Institutional Ownership

86.4% of Orbital ATK shares are held by institutional investors. Comparatively, 66.7% of Rockwell Collins shares are held by institutional investors. 1.2% of Orbital ATK shares are held by insiders. Comparatively, 1.5% of Rockwell Collins shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Orbital ATK has a beta of -0.31, indicating that its stock price is 131% less volatile than the S&P 500. Comparatively, Rockwell Collins has a beta of 0.78, indicating that its stock price is 22% less volatile than the S&P 500.

Profitability

This table compares Orbital ATK and Rockwell Collins’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Orbital ATK 6.11% 15.86% 5.38%
Rockwell Collins 11.52% 26.20% 7.76%

Dividends

Orbital ATK pays an annual dividend of $1.28 per share and has a dividend yield of 1.2%. Rockwell Collins pays an annual dividend of $1.32 per share and has a dividend yield of 1.0%. Rockwell Collins pays out 26.0% of its earnings in the form of a dividend. Orbital ATK has raised its dividend for 2 consecutive years. Orbital ATK is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Orbital ATK and Rockwell Collins’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Orbital ATK $4.48 billion 1.37 $624.00 million N/A N/A
Rockwell Collins $6.07 billion 3.40 $1.35 billion $5.07 25.06

Rockwell Collins has higher revenue and earnings than Orbital ATK.

Summary

Rockwell Collins beats Orbital ATK on 9 of the 15 factors compared between the two stocks.

Orbital ATK Company Profile

Orbital ATK, Inc. is an aerospace and defense systems company and supplier of related products to the United States Government, allied nations, prime contractors and other customers. The Company’s segments include Flight Systems Group, Defense Systems Group, Space Systems Group and Corporate. Its products include launch vehicles and related propulsion systems; satellites and associated components and services; tactical missiles, subsystems and defense electronics, and precision weapons, armament systems and ammunition. The Flight Systems Group segment consists of Launch Vehicles Division, Propulsion Systems Division and Aerospace Structures Division. The Defense Systems Group segment consists of Armament Systems Division, Defense Electronic Division, Missile Products Division and Small Caliber Systems Division. The Space Systems Group consists of Commercial Satellites Division, Government Satellites Division, Space Components Division and Technical Services Division.

Rockwell Collins Company Profile

Rockwell Collins, Inc. designs, produces and supports communications and aviation systems for commercial and military customers. The Company provides information management services through voice and data communication networks and solutions across the world. The Company operates through three segments: Commercial Systems, Government Systems and Information Management Services. The Commercial Systems segment supplies aviation electronics systems, products and services to customers located throughout the world. The Government Systems segment provides a range of electronic products, systems and services to customers including the United States Department of Defense, various ministries of defense, other government agencies and defense contractors around the world. The Information Management Services segment provides communications services, systems integration and security solutions across the aviation, airport, rail and nuclear security markets.

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