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

Dividends

Northrop Grumman pays an annual dividend of $4.80 per share and has a dividend yield of 1.9%. Applied Energetics does not pay a dividend. Northrop Grumman pays out 36.1% of its earnings in the form of a dividend. Northrop Grumman has raised its dividend for 10 consecutive years.

Institutional & Insider Ownership

82.9% of Northrop Grumman shares are held by institutional investors. 0.6% of Northrop Grumman shares are held by company insiders. Comparatively, 7.6% of Applied Energetics shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Northrop Grumman and Applied Energetics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Northrop Grumman 9.62% 38.27% 8.46%
Applied Energetics N/A N/A -540.21%

Analyst Recommendations

This is a summary of current ratings for Northrop Grumman and Applied Energetics, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Northrop Grumman 0 6 9 1 2.69
Applied Energetics 0 0 0 0 N/A

Northrop Grumman currently has a consensus target price of $348.13, suggesting a potential upside of 35.17%. Given Northrop Grumman’s higher probable upside, research analysts clearly believe Northrop Grumman is more favorable than Applied Energetics.

Valuation and Earnings

This table compares Northrop Grumman and Applied Energetics’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Northrop Grumman $25.80 billion 1.73 $2.02 billion $13.28 19.39
Applied Energetics N/A N/A -$790,000.00 N/A N/A

Northrop Grumman has higher revenue and earnings than Applied Energetics.

Volatility and Risk

Northrop Grumman has a beta of 0.82, meaning that its stock price is 18% less volatile than the S&P 500. Comparatively, Applied Energetics has a beta of 4.42, meaning that its stock price is 342% more volatile than the S&P 500.

Summary

Northrop Grumman beats Applied Energetics on 11 of the 14 factors compared between the two stocks.

Northrop Grumman Company Profile

Northrop Grumman Corporation operates as a security company for government and commercial customers worldwide. It 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 operates through three segments: Aerospace Systems, Mission Systems, and Technology Services. The Aerospace Systems segment designs, develops, integrates, and produces manned aircraft, autonomous systems, spacecraft, high-energy laser systems, microelectronics, and other systems/subsystems. This segment sells its products primarily to the Department of Defense (DoD) and other U.S. government agencies for use in various areas, including intelligence, surveillance, and reconnaissance; strike operations; communications; earth observation; and space science and exploration. The Mission Systems segment offers mission solutions and multifunction systems, including C4ISR systems; radar, electro-optical/infrared, and acoustic sensors; electronic warfare systems; cyber solutions; space systems; intelligence processing systems; air and missile defense integration; navigation; and shipboard missile and encapsulated payload launch systems for the DoD, intelligence community, international, federal-civil, and commercial customers. The Technology Services segment provides software and system sustainment, training, and integrated logistics support solutions, as well as engages in the modernization of platforms and associated subsystems. Northrop Grumman Corporation was founded in 1939 and is based in Falls Church, Virginia.

Applied Energetics Company Profile

Applied Energetics, Inc. engages in the development of ultra-short pulse lasers, laser guided energy, and direct discharge electrical products for military and commercial applications worldwide. It also offers high voltage electronics, optical systems, and integrated guided energy products. The company was founded in 1990 and is based in Tucson, Arizona.

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