Raytheon (NYSE: RTN) and TASER International (NASDAQ:AAXN) are both aerospace companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, profitability, valuation, analyst recommendations, dividends, earnings and institutional ownership.

Institutional and Insider Ownership

73.9% of Raytheon shares are held by institutional investors. Comparatively, 96.4% of TASER International shares are held by institutional investors. 0.2% of Raytheon shares are held by company insiders. Comparatively, 3.9% of TASER International shares are held 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.

Risk and Volatility

Raytheon has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500. Comparatively, TASER International has a beta of 1.17, indicating that its share price is 17% more volatile than the S&P 500.

Dividends

Raytheon pays an annual dividend of $3.19 per share and has a dividend yield of 1.7%. TASER International does not pay a dividend. Raytheon pays out 42.9% of its earnings in the form of a dividend. TASER International has raised its dividend for 12 consecutive years.

Profitability

This table compares Raytheon and TASER International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Raytheon 8.77% 20.98% 7.34%
TASER International 4.32% 7.91% 4.13%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Raytheon and TASER International, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Raytheon 0 2 13 0 2.87
TASER International 0 3 2 0 2.40

Raytheon presently has a consensus target price of $200.73, suggesting a potential upside of 7.89%. TASER International has a consensus target price of $29.33, suggesting a potential upside of 21.92%. Given TASER International’s higher possible upside, analysts plainly believe TASER International is more favorable than Raytheon.

Valuation & Earnings

This table compares Raytheon and TASER International’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Raytheon $24.07 billion 2.23 $2.21 billion $7.44 25.01
TASER International $268.24 million 4.75 $17.29 million $0.26 92.54

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

Summary

Raytheon beats TASER International on 9 of the 17 factors compared between the two stocks.

Raytheon Company Profile

Raytheon Company is a technology company, which specializes in defense and other government markets. The Company develops integrated products, services and solutions in various markets, including sensing; effects; command, control, communications, computers, cyber and intelligence; mission support, and cybersecurity. The Company operates through five segments: Integrated Defense Systems (IDS); Intelligence, Information and Services (IIS); Missile Systems (MS); Space and Airborne Systems (SAS), and Forcepoint. The IDS segment develops and produces sensors and mission systems. The IIS segment provides a range of technical and professional services to intelligence, defense, federal and commercial customers. The MS segment is a developer, integrator and producer of missile and combat systems. The SAS segment is engaged in the design, development and manufacture of integrated sensor and communication systems for missions. The Forcepoint segment develops cybersecurity products.

TASER International Company Profile

Axon Enterprise, Inc., formerly TASER International, Inc., is engaged in development, manufacture and sale of conducted electrical weapons (CEWs) for use by law enforcement, military, corrections and private security personnel, and by private individuals for personal defense. It is also engaged in development of connected wearable on-officer cameras. It operates through two segments: the sale of CEWs, accessories, and other related products and services (the TASER Weapons segment), and the Axon business, focused on devices, wearables, applications, cloud and mobile products (the Axon segment). Its TASER Weapons product line includes TASER X26P, TASER X2, TASER C2, TASER Pulse and Replacement Cartridges. Its hardware products include Axon Body 2, Axon Flex, Axon Fleet, Axon Interview, Axon Signal and Axon Dock. Its Axon software and mobile technologies include Evidence.com, Evidence.com for Prosecutors, Evidence Sync, Axon Capture, Axon View, Axon Five, Axon Convert and Axon Detect.

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