DigitalGlobe (NYSE: DGI) and General Dynamics Corporation (NYSE:GD) are both mid-cap computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, dividends, profitability, risk and valuation.

Analyst Ratings

This is a summary of current recommendations for DigitalGlobe and General Dynamics Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DigitalGlobe 0 4 1 0 2.20
General Dynamics Corporation 1 3 8 0 2.58

DigitalGlobe presently has a consensus target price of $33.90, indicating a potential downside of 1.88%. General Dynamics Corporation has a consensus target price of $205.50, indicating a potential upside of 3.65%. Given General Dynamics Corporation’s stronger consensus rating and higher possible upside, analysts clearly believe General Dynamics Corporation is more favorable than DigitalGlobe.

Volatility & Risk

DigitalGlobe has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500. Comparatively, General Dynamics Corporation has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500.

Insider and Institutional Ownership

96.3% of DigitalGlobe shares are owned by institutional investors. Comparatively, 86.2% of General Dynamics Corporation shares are owned by institutional investors. 1.9% of DigitalGlobe shares are owned by company insiders. Comparatively, 6.7% of General Dynamics Corporation shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares DigitalGlobe and General Dynamics Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DigitalGlobe 0.64% 2.40% 0.97%
General Dynamics Corporation 9.63% 28.17% 9.31%

Valuation & Earnings

This table compares DigitalGlobe and General Dynamics Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
DigitalGlobe $809.90 million 2.66 $402.60 million $0.02 1,728.36
General Dynamics Corporation $31.22 billion 1.90 $4.89 billion $9.72 20.40

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

Dividends

General Dynamics Corporation pays an annual dividend of $3.36 per share and has a dividend yield of 1.7%. DigitalGlobe does not pay a dividend. General Dynamics Corporation pays out 34.6% of its earnings in the form of a dividend. General Dynamics Corporation has raised its dividend for 19 consecutive years.

Summary

General Dynamics Corporation beats DigitalGlobe on 12 of the 17 factors compared between the two stocks.

DigitalGlobe Company Profile

DigitalGlobe, Inc. is a provider of Earth imagery, data and analysis. The Company’s imagery solutions and other services support a range of uses, including mission-planning, mapping and analysis, environmental monitoring, oil and gas exploration and infrastructure management. The Company’s imagery solutions and other services are sourced from its own satellite constellation and third-party providers. The Company sells its products and services through a combination of direct and indirect channels, consisting of a global network of resellers, strategic partners and direct enterprise sales to its United States Government and Diversified Commercial customer groups. The Company offers products consisting of imagery from its constellation of satellites, and provides geospatial products and services. The Company processes its imagery to varying levels according to its customers’ specifications and delivers its products using the distribution method.

General Dynamics Corporation Company Profile

General Dynamics Corporation is a global aerospace and defense company. The Company offers a portfolio of products and services in business aviation; combat vehicles, weapons systems and munitions; information technology (IT) services and C4ISR (command, control, communications, computers, intelligence, surveillance and reconnaissance) solutions, and shipbuilding and ship repair. It operates through four business groups: Aerospace, Combat Systems, Information Systems and Technology, and Marine Systems. Its Aerospace group offers aircraft design; cockpit and cabin systems, and product service and support. Its Combat Systems group offers combat vehicles, weapons systems and munitions. The Information Systems and Technology group provides technologies, products and services in support of various programs. The Marine Systems group is a designer and builder of nuclear-powered submarines, surface combatants and auxiliary and combat-logistics ships.

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