Head-To-Head Survey: Precision Castparts (PCP) vs. Lockheed Martin (LMT)

Precision Castparts (NYSE: PCP) and Lockheed Martin (NYSE:LMT) are both large-cap aerospace & defense – nec companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, risk, valuation, earnings and dividends.

Institutional & Insider Ownership

78.8% of Lockheed Martin shares are held by institutional investors. 0.4% of Lockheed Martin shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Precision Castparts pays an annual dividend of $0.12 per share and has a dividend yield of 0.1%. Lockheed Martin pays an annual dividend of $8.00 per share and has a dividend yield of 2.4%. Precision Castparts pays out 1.3% of its earnings in the form of a dividend. Lockheed Martin pays out 64.9% 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. Precision Castparts has raised its dividend for 15 consecutive years.

Valuation & Earnings

This table compares Precision Castparts and Lockheed Martin’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Precision Castparts N/A N/A N/A $9.53 24.65
Lockheed Martin $47.25 billion 2.02 $5.30 billion $12.33 27.01

Lockheed Martin has higher revenue and earnings than Precision Castparts. Precision Castparts is trading at a lower price-to-earnings ratio than Lockheed Martin, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Precision Castparts and Lockheed Martin’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Precision Castparts 15.17% 12.16% 6.86%
Lockheed Martin 7.31% 221.41% 7.65%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Precision Castparts and Lockheed Martin, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Precision Castparts 0 0 0 0 N/A
Lockheed Martin 0 5 8 0 2.62

Lockheed Martin has a consensus target price of $322.83, indicating a potential downside of 3.05%. Given Lockheed Martin’s higher probable upside, analysts clearly believe Lockheed Martin is more favorable than Precision Castparts.

Summary

Lockheed Martin beats Precision Castparts on 10 of the 13 factors compared between the two stocks.

Precision Castparts Company Profile

Precision Castparts Corp. is a manufacturer of metal components and products. The Company has three business segments: Investment Cast Products, Forged Products and Airframe Products. The Company’s Investment Cast Products segment manufactures investment castings and provides related investment casting materials and alloys, for aircraft engines, industrial gas turbine (IGT) engines, airframes, armaments, medical prostheses, unmanned aerial vehicles and other industrial applications. The Company’s Forged Products segment manufactures forged components from titanium and nickel-based alloys, and nickel, titanium and cobalt-based alloys for aerospace and non-aerospace markets, which include products for oil and gas, chemical processing and pollution control applications. The Company’s Airframe Products segment manufactures fasteners, fastener systems, fluid fittings, aerostructures and precision components, primarily for aerospace applications.

Lockheed Martin Company Profile

Lockheed Martin Corporation is a security and aerospace company. The Company operates through four segments. Aeronautics segment is engaged in the research, design, development, manufacture, integration, sustainment, support and upgrade of military aircraft, including combat and air mobility aircraft, unmanned air vehicles and related technologies. Missiles and Fire Control segment provides air and missile defense systems; fire control systems; manned and unmanned ground vehicles, and energy management solutions. Rotary and Mission Systems segment provides design, manufacture, service and support for a range of military and civil helicopters; mission systems and sensors for rotary and fixed-wing aircraft; simulation and training services, and unmanned systems and technologies, among others. Space Systems segment is engaged in the research and development, design, engineering and production of satellites, strategic and defensive missile systems and space transportation systems.

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