Elbit Systems (NASDAQ:ESLT) & Textron (NYSE:TXT) Head to Head Contrast

Textron (NYSE:TXT) and Elbit Systems (NASDAQ:ESLT) are both large-cap industrials companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, profitability, dividends, institutional ownership, valuation, analyst recommendations and earnings.

Profitability

This table compares Textron and Elbit Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Textron	6.12%	14.30%	6.26%
Elbit Systems	7.44%	16.66%	5.39%

Volatility and Risk

Textron has a beta of 0.9, meaning that its share price is 10% less volatile than the S&P 500. Comparatively, Elbit Systems has a beta of 0.14, meaning that its share price is 86% less volatile than the S&P 500.

Earnings and Valuation

This table compares Textron and Elbit Systems”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Textron	$14.80 billion	0.94	$921.00 million	$5.30	15.27
Elbit Systems	$8.55 billion	3.89	$534.34 million	$13.27	56.41

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

Dividends

Textron pays an annual dividend of $0.08 per share and has a dividend yield of 0.1%. Elbit Systems pays an annual dividend of $3.32 per share and has a dividend yield of 0.4%. Textron pays out 1.5% of its earnings in the form of a dividend. Elbit Systems pays out 25.0% 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. Elbit Systems has raised its dividend for 1 consecutive years. Elbit Systems is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

86.0% of Textron shares are owned by institutional investors. Comparatively, 17.9% of Elbit Systems shares are owned by institutional investors. 1.9% of Textron shares are owned by company insiders. Comparatively, 0.8% of Elbit Systems shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Textron and Elbit Systems, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Textron	0	6	3	1	2.50
Elbit Systems	0	5	0	0	2.00

Textron presently has a consensus target price of $102.44, suggesting a potential upside of 26.57%. Elbit Systems has a consensus target price of $870.00, suggesting a potential upside of 16.22%. Given Textron’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Textron is more favorable than Elbit Systems.

Summary

Textron beats Elbit Systems on 11 of the 18 factors compared between the two stocks.

About Textron

Textron Inc. operates in the aircraft, defense, industrial, and finance businesses worldwide. It operates through six segments: Textron Aviation, Bell, Textron Systems, Industrial, Textron eAviation, and Finance. The Textron Aviation segment manufactures, sells, and services business jets, turboprop and piston engine aircraft, and military trainer and defense aircraft; and offers maintenance, inspection, and repair services, as well as sells commercial parts. The Bell segment supplies military and commercial helicopters, tiltrotor aircrafts, and related spare parts and services. The Textron Systems segment offers unmanned aircraft systems, electronic systems and solutions, advanced marine crafts, piston aircraft engines, live military air-to-air and air-to-ship training, weapons and related components, and armored and specialty vehicles. The Industrial segment offers blow-molded solutions, including conventional plastic fuel tanks and pressurized fuel tanks for hybrid vehicle applications, clear-vision systems, plastic tanks for catalytic reduction systems, and battery housing systems for use in electric vehicles primarily to automobile original equipment manufacturers (OEMs); and golf cars, off-road utility vehicles, powersports products, light transportation vehicles, aviation ground support equipment, professional turf-maintenance equipment, and turf-care vehicles to golf courses and resorts, government agencies and municipalities, consumers, outdoor enthusiasts, and commercial and industrial users. The Textron eAviation segment manufactures and sells light aircraft and gliders with electric and combustion engines; and provides other research and development initiatives related to sustainable aviation solutions. The Finance segment offers financing services to purchase new and pre-owned aviation aircraft and Bell helicopters. Textron Inc. was founded in 1923 and is headquartered in Providence, Rhode Island.

About Elbit Systems

Elbit Systems Ltd. develops and supplies a portfolio of airborne, land, and naval systems and products for the defense, homeland security, and commercial aviation applications primarily in Israel. The company operates through Aerospace, C4I and Cyber, ISTAR and EW, Land, and Elbit Systems of America segments. It also offers military aircraft and helicopter systems; commercial aviation systems and aerostructures; unmanned aircraft systems; electro-optic, night vision, and countermeasures systems; naval systems; land vehicle systems; munitions, such as precision munitions for land, air, and sea applications; command, control, communications, computer, intelligence, surveillance and reconnaissance, and cyber systems; electronic warfare and signal intelligence systems; and other commercial activities. In addition, the company manufactures and sells data links and radio communication systems and equipment, and cyber intelligence, autonomous, and homeland security solutions. Further, it provides various electronic warfare and signal intelligence systems, and laser systems; armored vehicle and other platforms survivability and protection systems, artillery, and mortar systems, as well as provides various training and support services. Additionally, the company offers products and systems solutions to military, homeland security, medical instrumentation, and commercial aviation clients. It markets its systems and products as a prime contractor or subcontractor to various governments and companies. It also has operations in Israel, North America, Europe, Latin America, the Asia-Pacific, and internationally. The company was incorporated in 1966 and is based in Haifa, Israel.