Critical Analysis: United Technologies (UTX) & Lockheed Martin (LMT)
United Technologies (NYSE: UTX) and Lockheed Martin (NYSE:LMT) are both large-cap multi-sector conglomerates companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, risk, dividends and earnings.
United Technologies pays an annual dividend of $2.80 per share and has a dividend yield of 2.2%. Lockheed Martin pays an annual dividend of $8.00 per share and has a dividend yield of 2.5%. United Technologies pays out 43.4% of its earnings in the form of a dividend. Lockheed Martin pays out 64.4% 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. United Technologies has increased its dividend for 14 consecutive years and Lockheed Martin has increased its dividend for 5 consecutive years.
This table compares United Technologies and Lockheed Martin’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional & Insider Ownership
80.1% of United Technologies shares are owned by institutional investors. Comparatively, 78.8% of Lockheed Martin shares are owned by institutional investors. 0.2% of United Technologies shares are owned by insiders. Comparatively, 0.4% of Lockheed Martin shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
This is a summary of current recommendations for United Technologies and Lockheed Martin, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
United Technologies currently has a consensus target price of $126.31, suggesting a potential downside of 0.99%. Lockheed Martin has a consensus target price of $322.83, suggesting a potential upside of 0.56%. Given Lockheed Martin’s stronger consensus rating and higher possible upside, analysts plainly believe Lockheed Martin is more favorable than United Technologies.
Volatility and Risk
United Technologies has a beta of 1.07, meaning that its stock price is 7% more volatile than the S&P 500. Comparatively, Lockheed Martin has a beta of 0.58, meaning that its stock price is 42% less volatile than the S&P 500.
Valuation and Earnings
This table compares United Technologies and Lockheed Martin’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|United Technologies||$57.24 billion||1.78||$5.06 billion||$6.45||19.78|
|Lockheed Martin||$47.25 billion||1.95||$5.30 billion||$12.43||25.83|
Lockheed Martin has lower revenue, but higher earnings than United Technologies. United Technologies is trading at a lower price-to-earnings ratio than Lockheed Martin, indicating that it is currently the more affordable of the two stocks.
Lockheed Martin beats United Technologies on 11 of the 17 factors compared between the two stocks.
United Technologies Company Profile
United Technologies Corporation is engaged in providing high technology products and services to the building systems and aerospace industries around the world. The Company operates through four segments: Otis; UTC Climate, Controls & Security; Pratt & Whitney, and UTC Aerospace Systems. Otis operates as an elevator and escalator manufacturing, installation and service company. UTC Climate, Controls & Security segment is engaged in providing heating, ventilating, air conditioning (HVAC) and refrigeration solutions. The Pratt & Whitney segment supplies aircraft engines for the commercial, military, business jet and general aviation markets. Pratt & Whitney segment provides fleet management services and aftermarket maintenance, repair and overhaul services. The UTC Aerospace Systems segment provides aerospace products and aftermarket service solutions for aircraft manufacturers, airlines, regional, business and general aviation markets, military, space and undersea operations.
Lockheed Martin Company Profile
Lockheed Martin Corporation is a security and aerospace company. The Company operates through four segments. Aeronautics segment is engaged in the research, design, development, manufacture, integration, sustainment, support and upgrade of military aircraft, including combat and air mobility aircraft, unmanned air vehicles and related technologies. Missiles and Fire Control segment provides air and missile defense systems; fire control systems; manned and unmanned ground vehicles, and energy management solutions. Rotary and Mission Systems segment provides design, manufacture, service and support for a range of military and civil helicopters; mission systems and sensors for rotary and fixed-wing aircraft; simulation and training services, and unmanned systems and technologies, among others. Space Systems segment is engaged in the research and development, design, engineering and production of satellites, strategic and defensive missile systems and space transportation systems.
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