Leidos Holdings (NYSE: LDOS) and IHS (NYSE:IHS) are both aerospace companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitabiliy, valuation, analyst recommendations, earnings, institutional ownership, risk and dividends.

Profitability

This table compares Leidos Holdings and IHS’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Leidos Holdings 3.16% 16.70% 5.66%
IHS 7.63% 8.19% 2.73%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Leidos Holdings and IHS, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Leidos Holdings 0 3 6 0 2.67
IHS 0 4 1 0 2.20

Leidos Holdings currently has a consensus target price of $56.11, indicating a potential upside of 3.95%. IHS has a consensus target price of $64.00, indicating a potential downside of 45.42%. Given Leidos Holdings’ stronger consensus rating and higher probable upside, research analysts plainly believe Leidos Holdings is more favorable than IHS.

Insider and Institutional Ownership

76.3% of Leidos Holdings shares are owned by institutional investors. 1.7% of Leidos Holdings shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk & Volatility

Leidos Holdings has a beta of 1.74, meaning that its share price is 74% more volatile than the S&P 500. Comparatively, IHS has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500.

Valuation & Earnings

This table compares Leidos Holdings and IHS’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Leidos Holdings $8.31 billion 0.98 $779.00 million $2.21 24.43
IHS N/A N/A N/A $3.58 32.75

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

Dividends

Leidos Holdings pays an annual dividend of $1.28 per share and has a dividend yield of 2.4%. IHS does not pay a dividend. Leidos Holdings pays out 57.9% of its earnings in the form of a dividend. IHS has increased its dividend for 3 consecutive years.

Summary

Leidos Holdings beats IHS on 10 of the 14 factors compared between the two stocks.

Leidos Holdings Company Profile

Leidos Holdings, Inc. (Leidos) is a science and technology solutions company focused on delivering solutions primarily in the areas of national security, health and engineering. The Company is a holding company whose direct 100%-owned subsidiary is Leidos, Inc., which delivers science and technology solutions in the areas of national security, health and engineering to agencies of the United States Department of Defense (DoD), the intelligence community, the United States Department of Homeland Security, and other United States Government civil agencies, state and local government agencies, foreign governments and customers across a variety of commercial markets. The Company’s segments include Health and Engineering and National Security Solutions. On September 27, 2013, Leidos completed the separation of its technical services and enterprise information technology services business into an independent, publicly traded company named Science Applications International Corporation.

IHS Company Profile

IHS Inc. develops source of information, insight and analytics in different areas of business. The Company’s segments include Resources, Transportation and Consolidated Markets & Solutions. The Company’s Resources segment includes its Energy and Chemicals product offerings. Its Transportation segment includes its Automotive; Maritime & Trade, and Aerospace, Defense & Security product offerings. Its Consolidated Markets & Solutions segment includes its Product Design; Technology, Media & Telecom, and Economics & Country Risk product offerings. It provides authoritative analysis and forecasts of sales and production for light vehicles, medium and heavy commercial vehicles, powertrain, components and technology systems across various markets. Its product design offerings include content and analysis on various engineering and technical standards, codes, reference books, journals, and other scientific and technical documents, as well as software-based engineering decision engines.

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