BWX Technologies (NYSE: BWXT) and Raytheon Company (NYSE:RTN) are both mid-cap industrials companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, profitabiliy, valuation, dividends, earnings, institutional ownership and analyst recommendations.

Analyst Recommendations

This is a summary of current ratings for BWX Technologies and Raytheon Company, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BWX Technologies 0 1 4 0 2.80
Raytheon Company 0 1 11 0 2.92

BWX Technologies presently has a consensus target price of $51.40, suggesting a potential upside of 1.98%. Raytheon Company has a consensus target price of $166.18, suggesting a potential downside of 0.51%. Given BWX Technologies’ higher possible upside, research analysts plainly believe BWX Technologies is more favorable than Raytheon Company.

Dividends

BWX Technologies pays an annual dividend of $0.44 per share and has a dividend yield of 0.9%. Raytheon Company pays an annual dividend of $3.19 per share and has a dividend yield of 1.9%. BWX Technologies pays out 24.0% of its earnings in the form of a dividend. Raytheon Company pays out 41.2% 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. BWX Technologies has increased its dividend for 12 consecutive years.

Profitability

This table compares BWX Technologies and Raytheon Company’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BWX Technologies 13.03% 125.58% 13.99%
Raytheon Company 9.41% 20.45% 7.12%

Earnings & Valuation

This table compares BWX Technologies and Raytheon Company’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
BWX Technologies $1.61 billion 3.10 $316.03 million $1.83 27.54
Raytheon Company $24.27 billion 2.00 $3.82 billion $7.75 21.55

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

Insider & Institutional Ownership

96.5% of BWX Technologies shares are held by institutional investors. Comparatively, 76.2% of Raytheon Company shares are held by institutional investors. 0.8% of BWX Technologies shares are held by insiders. Comparatively, 0.2% of Raytheon Company shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk & Volatility

BWX Technologies has a beta of 0.44, suggesting that its share price is 56% less volatile than the S&P 500. Comparatively, Raytheon Company has a beta of 0.58, suggesting that its share price is 42% less volatile than the S&P 500.

Summary

BWX Technologies beats Raytheon Company on 10 of the 17 factors compared between the two stocks.

About BWX Technologies

BWX Technologies, Inc. is a manufacturer of nuclear components and a service provider. The Company’s businesses focus on the design, engineering and manufacture of precision naval nuclear components, reactors and nuclear fuel for the United States Government. Its segments include Nuclear Operations, Technical Services, Nuclear Energy and Other. It provides uranium processing and environmental site restoration services, as well as a range of products and services to customers in the nuclear power industry. Nuclear Operations engineers, designs and manufactures precision naval nuclear components and reactors for the United States Department of Energy/National Nuclear Security Administration’s Naval Nuclear Propulsion Program. Technical Services provides various services to the United States Government. Nuclear Energy designs, licenses, manufactures and delivers commercial nuclear steam generators, pressure vessels, reactor components, heat exchangers and other auxiliary equipment.

About Raytheon Company

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.

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