General Dynamics (NYSE: GD) and Rockwell Collins (NYSE:COL) are both large-cap industrials companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, profitability, valuation and risk.
Insider & Institutional Ownership
86.8% of General Dynamics shares are held by institutional investors. Comparatively, 72.2% of Rockwell Collins shares are held by institutional investors. 6.7% of General Dynamics shares are held by insiders. Comparatively, 1.1% of Rockwell Collins 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.
This is a breakdown of recent recommendations and price targets for General Dynamics and Rockwell Collins, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
General Dynamics currently has a consensus price target of $219.69, suggesting a potential upside of 5.80%. Rockwell Collins has a consensus price target of $125.35, suggesting a potential downside of 8.27%. Given General Dynamics’ stronger consensus rating and higher possible upside, equities research analysts clearly believe General Dynamics is more favorable than Rockwell Collins.
General Dynamics pays an annual dividend of $3.36 per share and has a dividend yield of 1.6%. Rockwell Collins pays an annual dividend of $1.32 per share and has a dividend yield of 1.0%. General Dynamics pays out 33.4% of its earnings in the form of a dividend. Rockwell Collins pays out 27.6% 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. General Dynamics has raised its dividend for 20 consecutive years. General Dynamics is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares General Dynamics and Rockwell Collins’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility and Risk
General Dynamics has a beta of 0.72, indicating that its stock price is 28% less volatile than the S&P 500. Comparatively, Rockwell Collins has a beta of 0.72, indicating that its stock price is 28% less volatile than the S&P 500.
Valuation & Earnings
This table compares General Dynamics and Rockwell Collins’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|General Dynamics||$31.35 billion||1.98||$2.96 billion||$10.07||20.62|
|Rockwell Collins||$6.82 billion||3.28||$705.00 million||$4.78||28.59|
General Dynamics has higher revenue and earnings than Rockwell Collins. General Dynamics is trading at a lower price-to-earnings ratio than Rockwell Collins, indicating that it is currently the more affordable of the two stocks.
General Dynamics beats Rockwell Collins on 12 of the 16 factors compared between the two stocks.
General Dynamics Company Profile
General Dynamics Corporation is a global aerospace and defense company. The Company offers a portfolio of products and services in business aviation; combat vehicles, weapons systems and munitions; information technology (IT) services and C4ISR (command, control, communications, computers, intelligence, surveillance and reconnaissance) solutions, and shipbuilding and ship repair. It operates through four business groups: Aerospace, Combat Systems, Information Systems and Technology, and Marine Systems. Its Aerospace group offers aircraft design; cockpit and cabin systems, and product service and support. Its Combat Systems group offers combat vehicles, weapons systems and munitions. The Information Systems and Technology group provides technologies, products and services in support of various programs. The Marine Systems group is a designer and builder of nuclear-powered submarines, surface combatants and auxiliary and combat-logistics ships.
Rockwell Collins Company Profile
Rockwell Collins, Inc. designs, produces and supports communications and aviation systems for commercial and military customers. The Company provides information management services through voice and data communication networks and solutions across the world. The Company operates through three segments: Commercial Systems, Government Systems and Information Management Services. The Commercial Systems segment supplies aviation electronics systems, products and services to customers located throughout the world. The Government Systems segment provides a range of electronic products, systems and services to customers including the United States Department of Defense, various ministries of defense, other government agencies and defense contractors around the world. The Information Management Services segment provides communications services, systems integration and security solutions across the aviation, airport, rail and nuclear security markets.
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