Northrop Grumman (NOC) vs. AeroVironment (AVAV) Critical Analysis
Northrop Grumman (NYSE: NOC) and AeroVironment (NASDAQ:AVAV) are both industrials companies, but which is the better stock? We will compare the two companies based on the strength of their earnings, risk, valuation, profitability, institutional ownership, dividends and analyst recommendations.
This table compares Northrop Grumman and AeroVironment’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of recent ratings and recommmendations for Northrop Grumman and AeroVironment, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Northrop Grumman currently has a consensus target price of $302.54, suggesting a potential downside of 4.71%. AeroVironment has a consensus target price of $39.50, suggesting a potential downside of 26.06%. Given Northrop Grumman’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Northrop Grumman is more favorable than AeroVironment.
Institutional and Insider Ownership
81.2% of Northrop Grumman shares are owned by institutional investors. Comparatively, 74.0% of AeroVironment shares are owned by institutional investors. 0.7% of Northrop Grumman shares are owned by company insiders. Comparatively, 11.0% of AeroVironment 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.
Valuation and Earnings
This table compares Northrop Grumman and AeroVironment’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Northrop Grumman||$24.51 billion||2.26||$2.20 billion||$13.42||23.66|
|AeroVironment||$264.87 million||4.81||$12.47 million||$1.27||42.06|
Northrop Grumman has higher revenue and earnings than AeroVironment. Northrop Grumman is trading at a lower price-to-earnings ratio than AeroVironment, indicating that it is currently the more affordable of the two stocks.
Northrop Grumman pays an annual dividend of $4.00 per share and has a dividend yield of 1.3%. AeroVironment does not pay a dividend. Northrop Grumman pays out 29.8% of its earnings in the form of a dividend. Northrop Grumman has raised its dividend for 10 consecutive years.
Risk & Volatility
Northrop Grumman has a beta of 0.69, meaning that its stock price is 31% less volatile than the S&P 500. Comparatively, AeroVironment has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500.
Northrop Grumman beats AeroVironment on 11 of the 17 factors compared between the two stocks.
Northrop Grumman Company Profile
Northrop Grumman Corporation is a global security company. The Company provides products, systems and solutions in autonomous systems; cyber; command, control, communications and computers, intelligence, surveillance and reconnaissance (C4ISR); strike, and logistics and modernization. The Company’s segments include Aerospace Systems, Mission Systems and Technology Services. The Company’s Aerospace Systems segment is engaged in the design, development, integration and production of manned aircraft, autonomous systems, spacecraft, high-energy laser systems, microelectronics and other systems/subsystems. The Mission Systems segment offers mission solutions and multifunction systems for Department of Defense (DoD), intelligence community, international, federal civil and commercial customers. The Technology Services segment provides logistics solutions supporting the full life cycle of platforms and systems for global defense and federal-civil customers.
AeroVironment Company Profile
AeroVironment, Inc. designs, develops, produces, supports and operates a portfolio of products and services for government agencies, businesses and consumers. The Company operates through two segments: Unmanned Aircraft Systems (UAS), which focuses primarily on the design, development, production, support and operation of UAS and tactical missile systems that provide situational awareness, multi-band communications, force protection and other mission effects, and Efficient Energy Systems (EES), which focuses primarily on the design, development, production, marketing, support and operation of electric energy systems. The Company supplies UAS, tactical missile systems and related services primarily to organizations within the United States Department of Defense (DoD). The Company also supplies charging systems and services for electric vehicles (EVs), and power cycling and test systems to commercial, consumer and government customers.
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