Critical Analysis: Leidos (NYSE:LDOS) & ICF International (NASDAQ:ICFI)

ICF International (NASDAQ:ICFI) and Leidos (NYSE:LDOS) are both industrials companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, risk, earnings, profitability, dividends, valuation and analyst recommendations.

Valuation and Earnings

This table compares ICF International and Leidos”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ICF International	$1.87 billion	0.84	$91.59 million	$4.83	18.22
Leidos	$17.17 billion	0.97	$1.45 billion	$10.72	12.42

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

Insider and Institutional Ownership

94.1% of ICF International shares are held by institutional investors. Comparatively, 76.1% of Leidos shares are held by institutional investors. 1.7% of ICF International shares are held by insiders. Comparatively, 0.8% of Leidos shares are held by 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.

Profitability

This table compares ICF International and Leidos’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ICF International	4.86%	11.53%	5.73%
Leidos	7.80%	30.81%	10.78%

Risk and Volatility

ICF International has a beta of 0.52, indicating that its share price is 48% less volatile than the S&P 500. Comparatively, Leidos has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for ICF International and Leidos, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ICF International	0	2	2	0	2.50
Leidos	0	10	6	1	2.47

ICF International currently has a consensus target price of $105.00, suggesting a potential upside of 19.32%. Leidos has a consensus target price of $162.93, suggesting a potential upside of 22.33%. Given Leidos’ higher possible upside, analysts plainly believe Leidos is more favorable than ICF International.

Dividends

ICF International pays an annual dividend of $0.56 per share and has a dividend yield of 0.6%. Leidos pays an annual dividend of $1.72 per share and has a dividend yield of 1.3%. ICF International pays out 11.6% of its earnings in the form of a dividend. Leidos pays out 16.0% 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. Leidos has increased its dividend for 6 consecutive years. Leidos is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Leidos beats ICF International on 13 of the 18 factors compared between the two stocks.

About ICF International

ICF International, Inc. provides management, technology, and policy consulting and implementation services to government and commercial clients in the United States and internationally. The company researches critical policy, industry, stakeholder issues, trends, and behaviors; measures and evaluates results and their impact; and provides strategic planning and advisory services to its clients on how to navigate societal, business, market, business, communication, and technology challenges. It also identifies, defines, and implements policies, plans, programs, and business tools through a range of standard and customized methodologies for its clients' business context; conducts survey research; collects and analyzes various data to understand critical issues and options for its clients; and provides actionable business intelligence, as well as information and data management solutions that allow integrated and purpose-driven data usage. In addition, the company provides solutions to optimize the customer and citizen experience; modernizes IT systems; and cyber security solutions that support the range of cyber security missions and protect IT infrastructures in the face of relentless threats, as well as designs, develops, and implements technology systems and business tools that are key to its clients' mission or business performance. Further, it informs and engages its clients' constituents, customers, and employees through public relations, branding and marketing, multichannel and strategic communications, and reputation issues management. The company serves energy, environment, infrastructure, and disaster recovery; health and social programs; and security and other civilian and commercial markets. The company was formerly known as ICF Consulting Group Holdings, LLC and changed its name to ICF International, Inc. in 2006. ICF International, Inc. was founded in 1969 and is headquartered in Reston, Virginia.

About Leidos

Leidos Holdings, Inc., together with its subsidiaries, provides services and solutions in the defense, intelligence, civil, and health markets in the United States and internationally. The company operates through Defense Solutions, Civil, and Health segments. The Defense Solutions segment offers national security solutions and systems for air, land, sea, space, and cyberspace for the U.S. Intelligence Community, the Department of Defense, the space development agency, the National Aeronautics and Space Administration, defense information systems agency, military services, and government agencies of U.S. allies abroad, as well as other federal and commercial customers in the national security industry. The solutions include technology, large-scale systems, command and control platforms, data analytics, logistics, and cybersecurity solutions, as well as intelligence analysis and operations support services to critical missions. The Civil segment provides systems integration services to air navigation service providers, including the federal aviation administration, the En route automation modernization, advanced technology oceanic procedure, time based flow management, terminal flight data management, geo-7, and future flight services, as well as enterprise-information display systems; and security detection services. It also offers information technology (IT) solutions in cloud computing, mobility, application modernization, DevOps, data center, network modernization, asset management, help desk operations, and digital workplace enablement; and environment, energy, and infrastructure services. The Health segment offers solutions to federal and commercial customers responsible for health and well-being of people, include health information management, managed health, digital modernization, and life sciences research and development services. Leidos Holdings, Inc. was founded in 1969 and is headquartered in Reston, Virginia.