Orbital ATK (NYSE: OA) and L-3 Communications Holdings (NYSE:LLL) are both mid-cap aerospace companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, valuation, dividends, analyst recommendations, earnings and institutional ownership.

Dividends

Orbital ATK pays an annual dividend of $1.28 per share and has a dividend yield of 1.2%. L-3 Communications Holdings pays an annual dividend of $3.00 per share and has a dividend yield of 1.6%. L-3 Communications Holdings pays out 33.8% of its earnings in the form of a dividend. L-3 Communications Holdings has increased its dividend for 13 consecutive years. L-3 Communications Holdings is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Orbital ATK and L-3 Communications Holdings, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Orbital ATK 0 2 7 0 2.78
L-3 Communications Holdings 0 7 6 1 2.57

Orbital ATK presently has a consensus price target of $104.22, suggesting a potential downside of 2.22%. L-3 Communications Holdings has a consensus price target of $181.64, suggesting a potential downside of 1.09%. Given L-3 Communications Holdings’ higher possible upside, analysts plainly believe L-3 Communications Holdings is more favorable than Orbital ATK.

Profitability

This table compares Orbital ATK and L-3 Communications Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Orbital ATK 6.11% 15.62% 5.38%
L-3 Communications Holdings 6.44% 14.15% 5.60%

Risk & Volatility

Orbital ATK has a beta of -0.31, meaning that its stock price is 131% less volatile than the S&P 500. Comparatively, L-3 Communications Holdings has a beta of 1.15, meaning that its stock price is 15% more volatile than the S&P 500.

Earnings and Valuation

This table compares Orbital ATK and L-3 Communications Holdings’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Orbital ATK $4.51 billion 1.36 $607.00 million N/A N/A
L-3 Communications Holdings $10.90 billion 1.32 $1.32 billion $8.87 20.70

L-3 Communications Holdings has higher revenue and earnings than Orbital ATK.

Insider & Institutional Ownership

86.4% of Orbital ATK shares are owned by institutional investors. Comparatively, 81.2% of L-3 Communications Holdings shares are owned by institutional investors. 1.2% of Orbital ATK shares are owned by company insiders. Comparatively, 2.9% of L-3 Communications Holdings shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

L-3 Communications Holdings beats Orbital ATK on 10 of the 17 factors compared between the two stocks.

About Orbital ATK

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.

About L-3 Communications Holdings

L3 Technologies, Inc., formerly L-3 Communications Holdings, Inc., is a prime contractor in Intelligence, Surveillance and Reconnaissance (ISR) systems, aircraft sustainment, simulation and training, night vision and image intensification equipment and security and detection systems. The Company provides a broad range of communication and electronic systems and products used on military and commercial platforms. It operates through four segments: Electronic Systems, Aerospace Systems, Communication Systems and Sensor Systems. Electronic Systems provides a broad range of products and services for military and commercial customers in several niche markets across several business areas. Aerospace Systems delivers integrated solutions and provides engineering, modernization, upgrade, sustainment, and maintenance and logistics support. Communication Systems delivers products and services for the global communications market. Sensor Systems provides diverse sensor technologies.

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