Comparing Northrop Grumman (NOC) & Teledyne Technologies (TDY)

Northrop Grumman (NYSE: NOC) and Teledyne Technologies (NYSE:TDY) are both aerospace companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, risk, dividends, institutional ownership, profitability, valuation and analyst recommendations.

Profitability

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This table compares Northrop Grumman and Teledyne Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Northrop Grumman 7.81% 37.28% 8.28%
Teledyne Technologies 8.73% 14.07% 6.63%

Insider and Institutional Ownership

80.8% of Northrop Grumman shares are owned by institutional investors. Comparatively, 85.0% of Teledyne Technologies shares are owned by institutional investors. 0.6% of Northrop Grumman shares are owned by insiders. Comparatively, 3.7% of Teledyne Technologies shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Northrop Grumman and Teledyne Technologies’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Northrop Grumman $25.80 billion 2.37 $2.02 billion $13.28 26.48
Teledyne Technologies $2.60 billion 2.54 $227.20 million $6.93 26.78

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

Analyst Ratings

This is a summary of recent ratings and price targets for Northrop Grumman and Teledyne Technologies, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Northrop Grumman 0 3 12 0 2.80
Teledyne Technologies 0 1 1 0 2.50

Northrop Grumman currently has a consensus price target of $362.43, indicating a potential upside of 3.04%. Teledyne Technologies has a consensus price target of $187.50, indicating a potential upside of 1.04%. Given Northrop Grumman’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Northrop Grumman is more favorable than Teledyne Technologies.

Dividends

Northrop Grumman pays an annual dividend of $4.40 per share and has a dividend yield of 1.3%. Teledyne Technologies does not pay a dividend. Northrop Grumman pays out 33.1% of its earnings in the form of a dividend. Northrop Grumman has increased its dividend for 10 consecutive years.

Volatility and Risk

Northrop Grumman has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500. Comparatively, Teledyne Technologies has a beta of 0.99, meaning that its share price is 1% less volatile than the S&P 500.

Summary

Northrop Grumman beats Teledyne Technologies on 10 of the 17 factors compared between the two stocks.

About Northrop Grumman

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 Teledyne Technologies

Teledyne Technologies Incorporated provides enabling technologies for industrial growth markets. The Company’s segments include Instrumentation, Digital Imaging, Aerospace and Defense Electronics, and Engineered Systems. Instrumentation segment provides monitoring and control instruments for marine, environmental, industrial and other applications, as well as electronic test and measurement equipment. Digital Imaging segment includes sensors, cameras and systems, within the visible, infrared, ultraviolet and X-ray spectra. Aerospace and Defense Electronics segment provides electronic components and subsystems and communications products, including defense electronics. Engineered Systems segment provides systems engineering and integration and technology development, as well as manufacturing solutions.

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