DigitalGlobe (NYSE: DGI) and Raytheon (NYSE:RTN) are both mid-cap computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, dividends, institutional ownership, valuation and risk.

Valuation & Earnings

This table compares DigitalGlobe and Raytheon’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
DigitalGlobe $809.90 million 2.60 $402.60 million $0.02 1,690.85
Raytheon $24.52 billion 2.09 $3.71 billion $7.26 24.37

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

Profitability

This table compares DigitalGlobe and Raytheon’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DigitalGlobe 0.64% 2.40% 0.97%
Raytheon 8.68% 20.74% 7.24%

Dividends

Raytheon pays an annual dividend of $3.19 per share and has a dividend yield of 1.8%. DigitalGlobe does not pay a dividend. Raytheon pays out 43.9% of its earnings in the form of a dividend. Raytheon has increased its dividend for 12 consecutive years.

Institutional & Insider Ownership

97.3% of DigitalGlobe shares are held by institutional investors. Comparatively, 74.7% of Raytheon shares are held by institutional investors. 1.9% of DigitalGlobe shares are held by insiders. Comparatively, 0.2% of Raytheon shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk and Volatility

DigitalGlobe has a beta of 1.02, indicating that its share price is 2% more volatile than the S&P 500. Comparatively, Raytheon has a beta of 0.59, indicating that its share price is 41% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for DigitalGlobe and Raytheon, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DigitalGlobe 0 4 1 0 2.20
Raytheon 0 2 13 0 2.87

DigitalGlobe presently has a consensus price target of $33.90, suggesting a potential upside of 0.30%. Raytheon has a consensus price target of $182.71, suggesting a potential upside of 3.29%. Given Raytheon’s stronger consensus rating and higher possible upside, analysts clearly believe Raytheon is more favorable than DigitalGlobe.

Summary

Raytheon beats DigitalGlobe on 11 of the 17 factors compared between the two stocks.

DigitalGlobe Company Profile

DigitalGlobe, Inc. is a provider of Earth imagery, data and analysis. The Company’s imagery solutions and other services support a range of uses, including mission-planning, mapping and analysis, environmental monitoring, oil and gas exploration and infrastructure management. The Company’s imagery solutions and other services are sourced from its own satellite constellation and third-party providers. The Company sells its products and services through a combination of direct and indirect channels, consisting of a global network of resellers, strategic partners and direct enterprise sales to its United States Government and Diversified Commercial customer groups. The Company offers products consisting of imagery from its constellation of satellites, and provides geospatial products and services. The Company processes its imagery to varying levels according to its customers’ specifications and delivers its products using the distribution method.

Raytheon Company Profile

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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