Head-To-Head Comparison: Cubic (CUB) and Precision Castparts (PCP)
Cubic (NYSE: CUB) and Precision Castparts (NYSE:PCP) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, institutional ownership, profitability, earnings, dividends, risk and analyst recommendations.
Cubic pays an annual dividend of $0.27 per share and has a dividend yield of 0.4%. Precision Castparts pays an annual dividend of $0.12 per share and has a dividend yield of 0.1%. Cubic pays out -65.9% of its earnings in the form of a dividend. Precision Castparts pays out 1.3% 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 is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares Cubic and Precision Castparts’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Cubic||$1.49 billion||1.11||-$11.20 million||($0.41)||-147.56|
Precision Castparts has lower revenue, but higher earnings than Cubic. Cubic is trading at a lower price-to-earnings ratio than Precision Castparts, indicating that it is currently the more affordable of the two stocks.
This table compares Cubic and Precision Castparts’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider & Institutional Ownership
90.6% of Cubic shares are owned by institutional investors. 7.9% of Cubic shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
This is a breakdown of recent recommendations and price targets for Cubic and Precision Castparts, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Cubic currently has a consensus target price of $60.17, indicating a potential downside of 0.55%. Given Cubic’s higher probable upside, analysts clearly believe Cubic is more favorable than Precision Castparts.
Cubic beats Precision Castparts on 7 of the 11 factors compared between the two stocks.
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.
About Precision Castparts
Precision Castparts Corp. is a manufacturer of metal components and products. The Company has three business segments: Investment Cast Products, Forged Products and Airframe Products. The Company’s Investment Cast Products segment manufactures investment castings and provides related investment casting materials and alloys, for aircraft engines, industrial gas turbine (IGT) engines, airframes, armaments, medical prostheses, unmanned aerial vehicles and other industrial applications. The Company’s Forged Products segment manufactures forged components from titanium and nickel-based alloys, and nickel, titanium and cobalt-based alloys for aerospace and non-aerospace markets, which include products for oil and gas, chemical processing and pollution control applications. The Company’s Airframe Products segment manufactures fasteners, fastener systems, fluid fittings, aerostructures and precision components, primarily for aerospace applications.
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