BWX Technologies (BWXT) versus Arconic (ARNC) Critical Analysis
BWX Technologies (NYSE: BWXT) and Arconic (NYSE:ARNC) are both mid-cap computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, profitability, valuation, risk, institutional ownership and earnings.
BWX Technologies pays an annual dividend of $0.44 per share and has a dividend yield of 0.7%. Arconic pays an annual dividend of $0.24 per share and has a dividend yield of 1.0%. BWX Technologies pays out 22.4% of its earnings in the form of a dividend. Arconic pays out -15.1% 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. Arconic is clearly the better dividend stock, given its higher yield and lower payout ratio.
Risk & Volatility
BWX Technologies has a beta of 0.47, suggesting that its stock price is 53% less volatile than the S&P 500. Comparatively, Arconic has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500.
This is a summary of recent recommendations and price targets for BWX Technologies and Arconic, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
BWX Technologies presently has a consensus price target of $62.00, indicating a potential upside of 1.56%. Arconic has a consensus price target of $28.57, indicating a potential upside of 19.10%. Given Arconic’s higher probable upside, analysts clearly believe Arconic is more favorable than BWX Technologies.
Valuation & Earnings
This table compares BWX Technologies and Arconic’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|BWX Technologies||$1.55 billion||3.91||$183.05 million||$1.96||31.15|
|Arconic||$12.39 billion||0.93||-$941.00 million||($1.59)||-15.09|
BWX Technologies has higher revenue, but lower earnings than Arconic. Arconic is trading at a lower price-to-earnings ratio than BWX Technologies, indicating that it is currently the more affordable of the two stocks.
This table compares BWX Technologies and Arconic’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider & Institutional Ownership
94.0% of BWX Technologies shares are held by institutional investors. Comparatively, 73.2% of Arconic shares are held by institutional investors. 0.8% of BWX Technologies shares are held by insiders. Comparatively, 0.1% of Arconic shares are held 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.
BWX Technologies beats Arconic on 10 of the 16 factors compared between the two stocks.
BWX Technologies Company Profile
BWX Technologies, Inc. is a manufacturer of nuclear components and a service provider. The Company’s businesses focus on the design, engineering and manufacture of precision naval nuclear components, reactors and nuclear fuel for the United States Government. Its segments include Nuclear Operations, Technical Services, Nuclear Energy and Other. It provides uranium processing and environmental site restoration services, as well as a range of products and services to customers in the nuclear power industry. Nuclear Operations engineers, designs and manufactures precision naval nuclear components and reactors for the United States Department of Energy/National Nuclear Security Administration’s Naval Nuclear Propulsion Program. Technical Services provides various services to the United States Government. Nuclear Energy designs, licenses, manufactures and delivers commercial nuclear steam generators, pressure vessels, reactor components, heat exchangers and other auxiliary equipment.
Arconic Company Profile
Arconic Inc., formerly Alcoa Inc., is engaged in lightweight metals engineering and manufacturing. The Company operates through three segments: Global Rolled Products, Engineered Products and Solutions, and Transportation and Construction Solutions. Its multi-material products, which include aluminum, titanium and nickel, are used around the world in markets, such as aerospace, automotive, commercial transportation and packaging. The Global Rolled Products segment produces a range of aluminum sheet and plate products for the aerospace, automotive, commercial transportation, brazing and industrial markets. The Engineered Products and Solutions segment develops and manufactures products for the aerospace (commercial and defense), commercial transportation and power generation end markets. The Transportation and Construction Solutions segment produces products that are used in the non-residential building and construction and commercial transportation end markets.
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