Raytheon (NYSE: RTN) and B/E Aerospace (NASDAQ:BEAV) are both industrials companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, earnings, dividends, risk, valuation, institutional ownership and analyst recommendations.
Earnings and Valuation
This table compares Raytheon and B/E Aerospace’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Raytheon||$25.35 billion||2.37||$2.02 billion||$7.53||27.66|
Raytheon has higher revenue and earnings than B/E Aerospace. B/E Aerospace is trading at a lower price-to-earnings ratio than Raytheon, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current ratings and price targets for Raytheon and B/E Aerospace, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Raytheon presently has a consensus price target of $215.73, indicating a potential upside of 3.56%. B/E Aerospace has a consensus price target of $62.00, indicating a potential upside of Infinity. Given B/E Aerospace’s higher probable upside, analysts clearly believe B/E Aerospace is more favorable than Raytheon.
Raytheon pays an annual dividend of $3.19 per share and has a dividend yield of 1.5%. B/E Aerospace pays an annual dividend of $0.84 per share. Raytheon pays out 42.4% of its earnings in the form of a dividend. B/E Aerospace pays out 27.3% 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. B/E Aerospace has increased its dividend for 13 consecutive years.
Institutional and Insider Ownership
73.5% of Raytheon shares are held by institutional investors. Comparatively, 92.0% of B/E Aerospace shares are held by institutional investors. 0.2% of Raytheon shares are held by insiders. Comparatively, 0.5% of B/E Aerospace shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
This table compares Raytheon and B/E Aerospace’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
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 B/E Aerospace
B/E Aerospace, Inc. is a manufacturer of cabin interior products for commercial aircraft and business jets. The Company sells its products and provides services directly to airlines and aerospace manufacturer. It operates through two segments. The Company manufactures aircraft seats, offering a selection of first class, business class, tourist class and regional aircraft seats. It manufactures and sells seats, which include the seat frame, cushions, armrests, tray table and a range of optional features, such as adjustable lumbar supports, electrical actuation systems, footrests, reading lights, head/neck supports and other comfort amenities. The business jet segment’s products include a range of business jet seating and sofa products, including electric fully berthing lie-flat seats, air valves and oxygen delivery systems as well as sidewalls, bulkheads, credenzas, closets, galley structures, lavatories, wastewater systems, de-icing systems, cabin management systems and tables.
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