Northrop Grumman (NOC) vs. Teledyne Technologies (TDY) Head-To-Head Analysis

Northrop Grumman (NYSE: NOC) and Teledyne Technologies (NYSE:TDY) are both aerospace companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, risk, institutional ownership, earnings and analyst recommendations.

Dividends

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Northrop Grumman pays an annual dividend of $4.40 per share and has a dividend yield of 1.3%. Teledyne Technologies does not pay a dividend. Northrop Grumman pays out 33.1% of its earnings in the form of a dividend. Northrop Grumman has raised its dividend for 10 consecutive years.

Institutional and Insider Ownership

80.8% of Northrop Grumman shares are held by institutional investors. Comparatively, 85.0% of Teledyne Technologies shares are held by institutional investors. 0.6% of Northrop Grumman shares are held by company insiders. Comparatively, 3.7% of Teledyne Technologies shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

Northrop Grumman has a beta of 0.78, indicating that its stock price is 22% less volatile than the S&P 500. Comparatively, Teledyne Technologies has a beta of 0.99, indicating that its stock price is 1% less volatile than the S&P 500.

Profitability

This table compares Northrop Grumman and Teledyne Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Northrop Grumman 7.81% 37.28% 8.28%
Teledyne Technologies 8.73% 14.07% 6.63%

Valuation & Earnings

This table compares Northrop Grumman and Teledyne Technologies’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Northrop Grumman $25.80 billion 2.37 $2.02 billion $13.28 26.40
Teledyne Technologies $2.60 billion 2.65 $227.20 million $6.93 27.92

Northrop Grumman has higher revenue and earnings than Teledyne Technologies. Northrop Grumman is trading at a lower price-to-earnings ratio than Teledyne Technologies, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings for Northrop Grumman and Teledyne Technologies, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Northrop Grumman 0 3 12 0 2.80
Teledyne Technologies 0 1 1 0 2.50

Northrop Grumman currently has a consensus target price of $363.36, indicating a potential upside of 3.64%. Teledyne Technologies has a consensus target price of $187.50, indicating a potential downside of 3.08%. Given Northrop Grumman’s stronger consensus rating and higher probable upside, equities analysts plainly believe Northrop Grumman is more favorable than Teledyne Technologies.

Summary

Northrop Grumman beats Teledyne Technologies on 10 of the 17 factors compared between the two stocks.

Northrop Grumman Company Profile

Northrop Grumman Corporation operates as a security company for government and commercial customers worldwide. It provides products, systems, and solutions in autonomous systems; cyber; command, control, communications and computers, intelligence, surveillance, and reconnaissance (C4ISR); strike; and logistics and modernization. The company operates through three segments: Aerospace Systems, Mission Systems, and Technology Services. The Aerospace Systems segment designs, develops, integrates, and produces manned aircraft, autonomous systems, spacecraft, high-energy laser systems, microelectronics, and other systems/subsystems. This segment sells its products primarily to the Department of Defense (DoD) and other U.S. government agencies for use in various areas, including intelligence, surveillance, and reconnaissance; strike operations; communications; earth observation; and space science and exploration. The Mission Systems segment offers mission solutions and multifunction systems, including C4ISR systems; radar, electro-optical/infrared, and acoustic sensors; electronic warfare systems; cyber solutions; space systems; intelligence processing systems; air and missile defense integration; navigation; and shipboard missile and encapsulated payload launch systems for the DoD, intelligence community, international, federal-civil, and commercial customers. The Technology Services segment provides software and system sustainment, training, and integrated logistics support solutions, as well as engages in the modernization of platforms and associated subsystems. Northrop Grumman Corporation was founded in 1939 and is based in Falls Church, Virginia.

Teledyne Technologies Company Profile

Teledyne Technologies Incorporated provides enabling technologies for industrial growth markets. The Company’s segments include Instrumentation, Digital Imaging, Aerospace and Defense Electronics, and Engineered Systems. Instrumentation segment provides monitoring and control instruments for marine, environmental, industrial and other applications, as well as electronic test and measurement equipment. Digital Imaging segment includes sensors, cameras and systems, within the visible, infrared, ultraviolet and X-ray spectra. Aerospace and Defense Electronics segment provides electronic components and subsystems and communications products, including defense electronics. Engineered Systems segment provides systems engineering and integration and technology development, as well as manufacturing solutions.

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