Lockheed Martin (NYSE:LMT) and Honeywell International (NYSE:HON) are both large-cap aerospace companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, valuation, dividends, analyst recommendations and risk.
Analyst Recommendations
This is a breakdown of recent recommendations and price targets for Lockheed Martin and Honeywell International, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Lockheed Martin | 0 | 4 | 10 | 0 | 2.71 |
Honeywell International | 0 | 9 | 10 | 0 | 2.53 |
Lockheed Martin currently has a consensus price target of $418.1538, suggesting a potential upside of 25.65%. Honeywell International has a consensus price target of $196.1176, suggesting a potential downside of 3.25%. Given Lockheed Martin's stronger consensus rating and higher possible upside, equities analysts plainly believe Lockheed Martin is more favorable than Honeywell International.
Volatility & Risk
Lockheed Martin has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500. Comparatively, Honeywell International has a beta of 1.13, meaning that its stock price is 13% more volatile than the S&P 500.
Dividends
Lockheed Martin pays an annual dividend of $10.40 per share and has a dividend yield of 3.1%. Honeywell International pays an annual dividend of $3.72 per share and has a dividend yield of 1.8%. Lockheed Martin pays out 47.4% of its earnings in the form of a dividend. Honeywell International pays out 45.6% 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. Lockheed Martin has increased its dividend for 18 consecutive years and Honeywell International has increased its dividend for 10 consecutive years. Lockheed Martin is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Profitability
This table compares Lockheed Martin and Honeywell International's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Lockheed Martin | 10.18% | 173.43% | 13.57% |
Honeywell International | 14.99% | 27.69% | 8.34% |
Institutional and Insider Ownership
77.0% of Lockheed Martin shares are owned by institutional investors. Comparatively, 76.0% of Honeywell International shares are owned by institutional investors. 0.2% of Lockheed Martin shares are owned by insiders. Comparatively, 0.6% of Honeywell International shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Valuation & Earnings
This table compares Lockheed Martin and Honeywell International's revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Lockheed Martin | $59.81 billion | 1.56 | $6.23 billion | $21.95 | 15.16 |
Honeywell International | $36.71 billion | 3.84 | $6.14 billion | $8.16 | 24.84 |
Lockheed Martin has higher revenue and earnings than Honeywell International. Lockheed Martin is trading at a lower price-to-earnings ratio than Honeywell International, indicating that it is currently the more affordable of the two stocks.
Summary
Lockheed Martin beats Honeywell International on 10 of the 16 factors compared between the two stocks.