Raytheon (NYSE: RTN) and Triumph Group (NYSE:TGI) are both industrials companies, but which is the better business? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, profitability, institutional ownership, valuation and earnings.
Volatility & Risk
Raytheon has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500. Comparatively, Triumph Group has a beta of 1.76, meaning that its share price is 76% more volatile than the S&P 500.
This is a breakdown of current recommendations for Raytheon and Triumph Group, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Raytheon presently has a consensus price target of $204.40, suggesting a potential upside of 4.16%. Triumph Group has a consensus price target of $33.11, suggesting a potential upside of 16.38%. Given Triumph Group’s higher probable upside, analysts clearly believe Triumph Group is more favorable than Raytheon.
Raytheon pays an annual dividend of $3.19 per share and has a dividend yield of 1.6%. Triumph Group pays an annual dividend of $0.16 per share and has a dividend yield of 0.6%. Raytheon pays out 42.9% of its earnings in the form of a dividend. Triumph Group pays out -7.5% 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. Raytheon has raised its dividend for 13 consecutive years. Raytheon is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Raytheon and Triumph Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider & Institutional Ownership
73.3% of Raytheon shares are held by institutional investors. 0.2% of Raytheon shares are held by company insiders. Comparatively, 2.8% of Triumph Group shares are held 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.
Earnings & Valuation
This table compares Raytheon and Triumph Group’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Raytheon||$24.07 billion||2.36||$2.21 billion||$7.43||26.41|
|Triumph Group||$3.53 billion||0.40||-$42.95 million||($2.13)||-13.36|
Raytheon has higher revenue and earnings than Triumph Group. Triumph Group is trading at a lower price-to-earnings ratio than Raytheon, indicating that it is currently the more affordable of the two stocks.
Raytheon beats Triumph Group on 12 of the 17 factors compared between the two stocks.
Raytheon Company is a technology company, which specializes in defense and other government markets. The Company develops integrated products, services and solutions in various markets, including sensing; effects; command, control, communications, computers, cyber and intelligence; mission support, and cybersecurity. The Company operates through five segments: Integrated Defense Systems (IDS); Intelligence, Information and Services (IIS); Missile Systems (MS); Space and Airborne Systems (SAS), and Forcepoint. The IDS segment develops and produces sensors and mission systems. The IIS segment provides a range of technical and professional services to intelligence, defense, federal and commercial customers. The MS segment is a developer, integrator and producer of missile and combat systems. The SAS segment is engaged in the design, development and manufacture of integrated sensor and communication systems for missions. The Forcepoint segment develops cybersecurity products.
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.
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