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

Dividends

Northrop Grumman Corporation pays an annual dividend of $4.00 per share and has a dividend yield of 1.5%. Exelis does not pay a dividend. Northrop Grumman Corporation pays out 30.6% of its earnings in the form of a dividend. Exelis has increased its dividend for 9 consecutive years.

Insider and Institutional Ownership

81.5% of Northrop Grumman Corporation shares are held by institutional investors. 0.7% of Northrop Grumman Corporation shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Northrop Grumman Corporation and Exelis’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Northrop Grumman Corporation 9.20% 39.22% 8.74%
Exelis 7.52% 18.51% 4.87%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Northrop Grumman Corporation and Exelis, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Northrop Grumman Corporation 0 6 7 1 2.64
Exelis 0 0 0 0 N/A

Northrop Grumman Corporation presently has a consensus target price of $268.34, indicating a potential upside of 0.33%. Given Northrop Grumman Corporation’s higher probable upside, research analysts plainly believe Northrop Grumman Corporation is more favorable than Exelis.

Earnings and Valuation

This table compares Northrop Grumman Corporation and Exelis’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Northrop Grumman Corporation $25.19 billion 1.85 $3.80 billion $13.09 20.43
Exelis N/A N/A N/A N/A N/A

Northrop Grumman Corporation has higher revenue and earnings than Exelis.

Summary

Northrop Grumman Corporation beats Exelis on 10 of the 12 factors compared between the two stocks.

About Northrop Grumman Corporation

Northrop Grumman Corporation is a global security company. The Company 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’s segments include Aerospace Systems, Mission Systems and Technology Services. The Company’s Aerospace Systems segment is engaged in the design, development, integration and production of manned aircraft, autonomous systems, spacecraft, high-energy laser systems, microelectronics and other systems/subsystems. The Mission Systems segment offers mission solutions and multifunction systems for Department of Defense (DoD), intelligence community, international, federal civil and commercial customers. The Technology Services segment provides logistics solutions supporting the full life cycle of platforms and systems for global defense and federal-civil customers.

About Exelis

Exelis Inc. (Exelis) is a diversified aerospace, defense, information and services company. The Company delivers mission-critical solutions to military, government and commercial customers in the United States and globally. It operates in two segments: Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance (C4ISR) Electronics and Systems, and Information and Technical Services. Its C4ISR Electronics and Systems segment provides engineered systems and solutions, including: ISR systems; integrated electronic warfare systems; radar and sonar systems; electronic attack and release systems; communications solutions; space systems, and composite aerostructures. The Company’s Information and Technical Services segment provides a range of service solutions: systems integration; network design and development; air traffic management; cyber; intelligence; advanced engineering, and space launch and range-support.

Receive News & Stock Ratings for Northrop Grumman Corporation Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Northrop Grumman Corporation and related stocks with our FREE daily email newsletter.