Head to Head Contrast: Cubic Corporation (NYSE:CUB) and L-3 Communications Holdings (LLL)
L-3 Communications Holdings (NYSE: LLL) and Cubic Corporation (NYSE:CUB) are both aerospace companies, but which is the superior business? We will contrast the two companies based on the strength of their profitabiliy, valuation, earnings, analyst recommendations, risk, institutional ownership and dividends.
Institutional and Insider Ownership
81.9% of L-3 Communications Holdings shares are owned by institutional investors. Comparatively, 89.5% of Cubic Corporation shares are owned by institutional investors. 2.9% of L-3 Communications Holdings shares are owned by company insiders. Comparatively, 7.9% of Cubic Corporation shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
This table compares L-3 Communications Holdings and Cubic Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|L-3 Communications Holdings||6.44%||14.15%||5.60%|
L-3 Communications Holdings pays an annual dividend of $3.00 per share and has a dividend yield of 1.7%. Cubic Corporation pays an annual dividend of $0.27 per share and has a dividend yield of 0.6%. L-3 Communications Holdings pays out 33.8% of its earnings in the form of a dividend. Cubic Corporation pays out -128.6% 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. Cubic Corporation has increased its dividend for 13 consecutive years.
Valuation & Earnings
This table compares L-3 Communications Holdings and Cubic Corporation’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|L-3 Communications Holdings||$10.90 billion||1.26||$1.32 billion||$8.87||19.77|
|Cubic Corporation||$1.46 billion||0.87||$73.37 million||($0.21)||-223.10|
L-3 Communications Holdings has higher revenue and earnings than Cubic Corporation. Cubic Corporation is trading at a lower price-to-earnings ratio than L-3 Communications Holdings, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent recommendations and price targets for L-3 Communications Holdings and Cubic Corporation, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|L-3 Communications Holdings||0||8||5||0||2.38|
L-3 Communications Holdings currently has a consensus target price of $179.40, indicating a potential upside of 2.28%. Cubic Corporation has a consensus target price of $52.67, indicating a potential upside of 12.42%. Given Cubic Corporation’s stronger consensus rating and higher probable upside, analysts clearly believe Cubic Corporation is more favorable than L-3 Communications Holdings.
Risk & Volatility
L-3 Communications Holdings has a beta of 1.15, indicating that its share price is 15% more volatile than the S&P 500. Comparatively, Cubic Corporation has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500.
L-3 Communications Holdings beats Cubic Corporation on 10 of the 16 factors compared between the two stocks.
L-3 Communications Holdings Company Profile
L3 Technologies, Inc., formerly L-3 Communications Holdings, Inc., is a prime contractor in Intelligence, Surveillance and Reconnaissance (ISR) systems, aircraft sustainment, simulation and training, night vision and image intensification equipment and security and detection systems. The Company provides a broad range of communication and electronic systems and products used on military and commercial platforms. It operates through four segments: Electronic Systems, Aerospace Systems, Communication Systems and Sensor Systems. Electronic Systems provides a broad range of products and services for military and commercial customers in several niche markets across several business areas. Aerospace Systems delivers integrated solutions and provides engineering, modernization, upgrade, sustainment, and maintenance and logistics support. Communication Systems delivers products and services for the global communications market. Sensor Systems provides diverse sensor technologies.
Cubic Corporation Company Profile
Cubic Corporation (Cubic) designs, integrates and operates systems, products and services that provide situational awareness for its customers in the transportation and defense industries. The Company operates in three business segments across the global transportation and defense markets, which include Cubic Transportation Systems (CTS), Cubic Global Defense (CGD) and Cubic Global Defense Services (CGD Services). The Company’s CTS segment is a systems integrator of payment and information technology and services for travel solutions. The Company’s CGD Systems is focused on two primary lines of business: training systems and secure communications (SC) products. The Company’s CGD Services segment is a provider of training, operations, intelligence, maintenance, technical and other support services to the United States government and its agencies and allied nations. It also provides cross-domain hardware solutions to address multi-level security challenges across common networks.
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