Analyzing L-3 Communications Holdings (LLL) and United Technologies Corporation (UTX)
L-3 Communications Holdings (NYSE: LLL) and United Technologies Corporation (NYSE:UTX) are both large-cap aerospace companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, risk, analyst recommendations, profitability, valuation and earnings.
Volatility & Risk
L-3 Communications Holdings has a beta of 1.15, indicating that its share price is 15% more volatile than the S&P 500. Comparatively, United Technologies Corporation has a beta of 1.05, indicating that its share price is 5% more volatile than the S&P 500.
This table compares L-3 Communications Holdings and United Technologies Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|L-3 Communications Holdings||6.44%||14.15%||5.60%|
|United Technologies Corporation||9.15%||18.07%||5.91%|
This is a breakdown of current ratings and recommmendations for L-3 Communications Holdings and United Technologies Corporation, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|L-3 Communications Holdings||0||7||4||1||2.50|
|United Technologies Corporation||0||11||4||0||2.27|
L-3 Communications Holdings presently has a consensus target price of $190.56, indicating a potential upside of 1.54%. United Technologies Corporation has a consensus target price of $125.77, indicating a potential upside of 6.81%. Given United Technologies Corporation’s higher possible upside, analysts plainly believe United Technologies Corporation is more favorable than L-3 Communications Holdings.
Valuation & Earnings
This table compares L-3 Communications Holdings and United Technologies Corporation’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|L-3 Communications Holdings||$10.90 billion||1.35||$1.32 billion||$8.87||21.16|
|United Technologies Corporation||$58.11 billion||1.62||$10.15 billion||$6.56||17.95|
United Technologies Corporation has higher revenue and earnings than L-3 Communications Holdings. United Technologies Corporation is trading at a lower price-to-earnings ratio than L-3 Communications Holdings, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
79.1% of L-3 Communications Holdings shares are owned by institutional investors. Comparatively, 78.8% of United Technologies Corporation shares are owned by institutional investors. 2.9% of L-3 Communications Holdings shares are owned by company insiders. Comparatively, 0.2% of United Technologies Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
L-3 Communications Holdings pays an annual dividend of $3.00 per share and has a dividend yield of 1.6%. United Technologies Corporation pays an annual dividend of $2.80 per share and has a dividend yield of 2.4%. L-3 Communications Holdings pays out 33.8% of its earnings in the form of a dividend. United Technologies Corporation pays out 42.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. L-3 Communications Holdings has increased its dividend for 5 consecutive years and United Technologies Corporation has increased its dividend for 13 consecutive years. United Technologies Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
United Technologies Corporation beats L-3 Communications Holdings on 9 of the 17 factors compared between the two stocks.
L-3 Communications Holdings Company Profile
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.
United Technologies Corporation Company Profile
United Technologies Corporation is engaged in providing high technology products and services to the building systems and aerospace industries around the world. The Company operates through four segments: Otis; UTC Climate, Controls & Security; Pratt & Whitney, and UTC Aerospace Systems. Otis operates as an elevator and escalator manufacturing, installation and service company. UTC Climate, Controls & Security segment is engaged in providing heating, ventilating, air conditioning (HVAC) and refrigeration solutions. The Pratt & Whitney segment supplies aircraft engines for the commercial, military, business jet and general aviation markets. Pratt & Whitney segment provides fleet management services and aftermarket maintenance, repair and overhaul services. The UTC Aerospace Systems segment provides aerospace products and aftermarket service solutions for aircraft manufacturers, airlines, regional, business and general aviation markets, military, space and undersea operations.
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