Financial Analysis: L3 Technologies (LLL) and Triumph Group (TGI)

Triumph Group (NYSE: TGI) and L3 Technologies (NYSE:LLL) are both industrials companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, institutional ownership, analyst recommendations and risk.

Earnings & Valuation

This table compares Triumph Group and L3 Technologies’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Triumph Group $3.53 billion 0.39 -$42.95 million ($2.13) -13.10
L3 Technologies $10.51 billion 1.53 $710.00 million $7.27 28.30

L3 Technologies has higher revenue and earnings than Triumph Group. Triumph Group is trading at a lower price-to-earnings ratio than L3 Technologies, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Triumph Group and L3 Technologies, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Triumph Group 2 5 3 0 2.10
L3 Technologies 0 4 7 1 2.75

Triumph Group currently has a consensus target price of $33.11, indicating a potential upside of 18.68%. L3 Technologies has a consensus target price of $193.56, indicating a potential downside of 5.92%. Given Triumph Group’s higher possible upside, equities research analysts clearly believe Triumph Group is more favorable than L3 Technologies.

Profitability

This table compares Triumph Group and L3 Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Triumph Group -3.18% 27.18% 5.39%
L3 Technologies 5.22% 14.00% 5.59%

Volatility & Risk

Triumph Group has a beta of 1.76, indicating that its share price is 76% more volatile than the S&P 500. Comparatively, L3 Technologies has a beta of 1.19, indicating that its share price is 19% more volatile than the S&P 500.

Insider & Institutional Ownership

99.8% of Triumph Group shares are owned by institutional investors. Comparatively, 78.5% of L3 Technologies shares are owned by institutional investors. 2.8% of Triumph Group shares are owned by company insiders. Comparatively, 2.9% of L3 Technologies shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

Triumph Group pays an annual dividend of $0.16 per share and has a dividend yield of 0.6%. L3 Technologies pays an annual dividend of $3.00 per share and has a dividend yield of 1.5%. Triumph Group pays out -7.5% of its earnings in the form of a dividend. L3 Technologies pays out 41.3% 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. L3 Technologies has raised its dividend for 14 consecutive years. L3 Technologies is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

L3 Technologies beats Triumph Group on 13 of the 18 factors compared between the two stocks.

About Triumph Group

Triumph Group, Inc. designs, engineers, manufactures, repairs, overhauls and distributes a portfolio of aircraft components, accessories, subassemblies and systems. The Company offers a range of products and services to the aerospace industry through three segments: Triumph Aerostructures Group, whose companies are engaged in the design, manufacture, assembly and integration of metallic and composite aerostructures and structural components for the aerospace original equipment manufacturer (OEM) market; Triumph Aerospace Systems Group, whose companies design, engineer and manufacture a range of build-to-print components, assemblies and systems also for the OEM market, and Triumph Aftermarket Services Group, whose companies serve aircraft fleets, such as commercial airlines, the United States military and cargo carriers, through the maintenance, repair and overhaul (MRO) of aircraft components and accessories manufactured by third parties.

About L3 Technologies

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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