Critical Survey: Saab (OTCMKTS:SAABY) versus L3Harris Technologies (NYSE:LHX)

L3Harris Technologies (NYSE:LHX) and Saab (OTCMKTS:SAABY) are both large-cap industrials companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, profitability, earnings, dividends, valuation, risk and institutional ownership.

Profitability

This table compares L3Harris Technologies and Saab’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
L3Harris Technologies	8.17%	10.96%	5.18%
Saab	8.05%	15.87%	5.80%

Analyst Recommendations

This is a breakdown of recent ratings and target prices for L3Harris Technologies and Saab, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
L3Harris Technologies	0	8	8	2	2.67
Saab	0	3	0	2	2.80

L3Harris Technologies presently has a consensus target price of $350.08, suggesting a potential upside of 47.66%. Given L3Harris Technologies’ higher probable upside, research analysts clearly believe L3Harris Technologies is more favorable than Saab.

Volatility and Risk

L3Harris Technologies has a beta of 0.5, suggesting that its stock price is 50% less volatile than the S&P 500. Comparatively, Saab has a beta of -0.15, suggesting that its stock price is 115% less volatile than the S&P 500.

Dividends

L3Harris Technologies pays an annual dividend of $5.00 per share and has a dividend yield of 2.1%. Saab pays an annual dividend of $0.06 per share and has a dividend yield of 0.2%. L3Harris Technologies pays out 50.5% of its earnings in the form of a dividend. Saab pays out 8.6% 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. L3Harris Technologies has increased its dividend for 24 consecutive years. L3Harris Technologies is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

84.8% of L3Harris Technologies shares are owned by institutional investors. 0.7% of L3Harris Technologies shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares L3Harris Technologies and Saab”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
L3Harris Technologies	$21.86 billion	2.02	$1.61 billion	$9.90	23.95
Saab	$8.42 billion	3.81	$645.29 million	$0.70	42.77

L3Harris Technologies has higher revenue and earnings than Saab. L3Harris Technologies is trading at a lower price-to-earnings ratio than Saab, indicating that it is currently the more affordable of the two stocks.

Summary

L3Harris Technologies beats Saab on 11 of the 17 factors compared between the two stocks.

About L3Harris Technologies

L3Harris Technologies, Inc. provides mission-critical solutions for government and commercial customers worldwide. The company's Integrated Mission Systems segment provides intelligence, surveillance, and reconnaissance (ISR) systems, passive sensing and targeting, electronic attack, autonomy, power and communications, and networks and sensors, as well as advanced combat systems for air, land, and sea sectors. Its Space and Airborne Systems segment offers space payloads, sensors, and full-mission solutions; classified intelligence and cyber; mission avionics; electronic warfare systems; and mission networks systems for air traffic management operations. The company's Communication Systems segment provides broadband communications; tactical radios, software, satellite terminals, and end-to-end battlefield systems for the U.S. Department of Defense, international, federal, and state agency customers; integrated vision solutions, including helmet-mounted integrated night vision goggles with leading-edge image intensifier tubes and weapon-mounted sights, aiming lasers, and range finders; and public safety radios, and system applications and equipment. Its Aerojet Rocketdyne segment provides propulsion technologies and armament systems for strategic defense, missile defense, hypersonic, and tactical systems; and space propulsion and power systems for national security, and space and exploration missions. The company was formerly known as Harris Corporation and changed its name to L3Harris Technologies, Inc. in June 2019. L3Harris Technologies, Inc. was founded in 1895 and is based in Melbourne, Florida.

About Saab

Saab AB (publ) provides products, services, and solutions for military defense, aviation, and civil security markets worldwide. The company operates through Aeronautics, Dynamics, Surveillance, Kockums, and Combitech segments. The company develops military aviation technology, as well as conducts studies on manned and unmanned aircraft. It also provides ground combat weapons, missile systems, torpedoes, unmanned underwater vehicles, training and simulation systems, and signature management systems for armed forces; and niche products for the civil and defense market, such as underwater vehicles for the offshore industry. In addition, the company offers solutions for safety and security, surveillance and decision support, and threat detection, location, and protection, including airborne, ground-based and naval radar, electronic warfare, and combat systems, as well as C4I solutions. Additionally, it provides submarines with the Stirling system for air independent propulsion, surface combatants, mine hunting systems, and autonomous vessels; and systems development, systems integration, information security, systems security, communications, mechanics, and technical product information and logistics. Saab AB (publ) was incorporated in 1937 and is headquartered in Stockholm, Sweden.