Comparing RTX (NYSE:RTX) & Howmet Aerospace (NYSE:HWM)

RTX (NYSE:RTX) and Howmet Aerospace (NYSE:HWM) are both large-cap aerospace companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, risk, profitability, institutional ownership and earnings.

Valuation & Earnings

This table compares RTX and Howmet Aerospace”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RTX	$80.74 billion	2.84	$4.77 billion	$4.87	35.15
Howmet Aerospace	$7.43 billion	10.33	$1.16 billion	$3.56	53.63

RTX has higher revenue and earnings than Howmet Aerospace. RTX is trading at a lower price-to-earnings ratio than Howmet Aerospace, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

86.5% of RTX shares are held by institutional investors. Comparatively, 90.5% of Howmet Aerospace shares are held by institutional investors. 0.2% of RTX shares are held by company insiders. Comparatively, 1.1% of Howmet Aerospace 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.

Volatility and Risk

RTX has a beta of 0.44, suggesting that its stock price is 56% less volatile than the S&P 500. Comparatively, Howmet Aerospace has a beta of 1.32, suggesting that its stock price is 32% more volatile than the S&P 500.

Dividends

RTX pays an annual dividend of $2.72 per share and has a dividend yield of 1.6%. Howmet Aerospace pays an annual dividend of $0.48 per share and has a dividend yield of 0.3%. RTX pays out 55.9% of its earnings in the form of a dividend. Howmet Aerospace pays out 13.5% 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. RTX has raised its dividend for 5 consecutive years and Howmet Aerospace has raised its dividend for 5 consecutive years.

Profitability

This table compares RTX and Howmet Aerospace’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RTX	7.67%	13.28%	5.12%
Howmet Aerospace	18.18%	29.21%	12.96%

Analyst Ratings

This is a breakdown of current recommendations and price targets for RTX and Howmet Aerospace, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RTX	0	5	15	3	2.91
Howmet Aerospace	0	4	15	1	2.85

RTX currently has a consensus target price of $181.00, suggesting a potential upside of 5.75%. Howmet Aerospace has a consensus target price of $216.93, suggesting a potential upside of 13.61%. Given Howmet Aerospace’s higher probable upside, analysts clearly believe Howmet Aerospace is more favorable than RTX.

Summary

Howmet Aerospace beats RTX on 10 of the 16 factors compared between the two stocks.

About RTX

RTX Corporation, an aerospace and defense company, provides systems and services for the commercial, military, and government customers in the United States and internationally. It operates through three segments: Collins Aerospace, Pratt & Whitney, and Raytheon. The Collins Aerospace Systems segment offers aerospace and defense products, and aftermarket service solutions for civil and military aircraft manufacturers and commercial airlines, as well as regional, business, and general aviation, defense, and commercial space operations. This segment also designs, produces, and supports cabin interior, including oxygen systems, food and beverage preparation, storage and galley systems, and lavatory and wastewater management systems; battlespace, test and training range systems, crew escape systems, and simulation and training solutions; information management services; and aftermarket services that include spare parts, overhaul and repair, engineering and technical support, training and fleet management solutions, and asset and information management services. Its Pratt & Whitney segment supplies aircraft engines for commercial, military, business jet, and general aviation customers; and produces, sells, and services military and commercial auxiliary power units. The Raytheon segment provides defensive and offensive threat detection, tracking, and mitigation capabilities for U.S., foreign government, and commercial customers. The company was formerly known as Raytheon Technologies Corporation and changed its name to RTX Corporation in July 2023. RTX Corporation was incorporated in 1934 and is headquartered in Arlington, Virginia.

About Howmet Aerospace

Howmet Aerospace Inc. provides advanced engineered solutions for the aerospace and transportation industries in the United States, Japan, France, Germany, the United Kingdom, Mexico, Italy, Canada, Poland, China, and internationally. It operates through four segments: Engine Products, Fastening Systems, Engineered Structures, and Forged Wheels. The Engine Products segment offers airfoils and seamless rolled rings primarily for aircraft engines and industrial gas turbines; and rotating and structural parts. The Fastening Systems segment produces aerospace fastening systems, as well as commercial transportation, industrial, and other fasteners; and latches, bearings, fluid fittings, and installation tools. The Engineered Structures segment provides titanium ingots and mill products, aluminum and nickel forgings, and machined components and assemblies for aerospace and defense applications; and titanium forgings, extrusions, and forming and machining services for airframe, wing, aero-engine, and landing gear components. The Forged Wheels segment offers forged aluminum wheels and related products for heavy-duty trucks and commercial transportation markets. The company was formerly known as Arconic Inc. Howmet Aerospace Inc. was founded in 1888 and is based in Pittsburgh, Pennsylvania.