Reviewing Lockheed Martin (LMT) and Triumph Group (TGI)

Lockheed Martin (NYSE: LMT) and Triumph Group (NYSE:TGI) are both aerospace companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, risk, institutional ownership, valuation, dividends and earnings.

Analyst Recommendations

This is a summary of recent recommendations for Lockheed Martin and Triumph Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lockheed Martin 0 5 8 0 2.62
Triumph Group 2 5 3 0 2.10

Lockheed Martin presently has a consensus price target of $319.62, indicating a potential upside of 1.19%. Triumph Group has a consensus price target of $33.11, indicating a potential upside of 24.01%. Given Triumph Group’s higher probable upside, analysts plainly believe Triumph Group is more favorable than Lockheed Martin.

Profitability

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

Net Margins Return on Equity Return on Assets
Lockheed Martin 7.31% 221.41% 7.65%
Triumph Group -3.18% 27.18% 5.39%

Valuation & Earnings

This table compares Lockheed Martin and Triumph Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Lockheed Martin $47.25 billion 1.92 $5.30 billion $12.43 25.41
Triumph Group $3.53 billion 0.38 -$42.95 million ($2.13) -12.54

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

Dividends

Lockheed Martin pays an annual dividend of $8.00 per share and has a dividend yield of 2.5%. Triumph Group pays an annual dividend of $0.16 per share and has a dividend yield of 0.6%. Lockheed Martin pays out 64.4% 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. Lockheed Martin has increased its dividend for 14 consecutive years. Lockheed Martin is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Lockheed Martin has a beta of 0.58, suggesting that its stock price is 42% less volatile than the S&P 500. Comparatively, Triumph Group has a beta of 1.76, suggesting that its stock price is 76% more volatile than the S&P 500.

Insider & Institutional Ownership

78.9% of Lockheed Martin shares are owned by institutional investors. Comparatively, 99.8% of Triumph Group shares are owned by institutional investors. 0.4% of Lockheed Martin shares are owned by insiders. Comparatively, 2.8% of Triumph Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Lockheed Martin beats Triumph Group on 12 of the 17 factors compared between the two stocks.

About Lockheed Martin

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.

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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