Critical Survey: Rheinmetall (OTCMKTS:RNMBY) versus Thales (OTCMKTS:THLEF)

Thales (OTCMKTS:THLEF) and Rheinmetall (OTCMKTS:RNMBY) are both industrials companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, valuation, risk, institutional ownership, analyst recommendations, earnings and profitability.

Earnings and Valuation

This table compares Thales and Rheinmetall”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Thales	N/A	N/A	N/A	$4.07	72.57
Rheinmetall	N/A	N/A	N/A	$0.21	1,925.61

Thales is trading at a lower price-to-earnings ratio than Rheinmetall, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings for Thales and Rheinmetall, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Thales	0	0	0	0	0.00
Rheinmetall	0	0	1	2	3.67

Institutional & Insider Ownership

20.8% of Thales shares are owned by institutional investors. Comparatively, 0.3% of Rheinmetall shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Thales and Rheinmetall’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Thales	N/A	N/A	N/A
Rheinmetall	N/A	N/A	N/A

Dividends

Thales pays an annual dividend of $1.12 per share and has a dividend yield of 0.4%. Rheinmetall pays an annual dividend of $1.25 per share and has a dividend yield of 0.3%. Thales pays out 27.6% of its earnings in the form of a dividend. Rheinmetall pays out 581.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Thales is clearly the better dividend stock, given its higher yield and lower payout ratio.

About Thales

Thales S.A. provides various solutions in the defence and security, aerospace and space, digital identity and security, and transport markets worldwide. It operates through Aerospace, Defence & Security, Digital Identity & Security, and Ground Transportation Systems business segments. The company offers communications, command, and control systems; mission services and support; protection and mission/combat systems; surveillance, detection, and intelligence systems; training and simulation solutions for air, land, naval, and joint forces; and digital identity and security solutions. It also provides air traffic management solutions; flight decks and avionics equipment and functions; in-flight entertainment, connectivity, and services; drone solutions; aerospace trading solutions; navigation solutions; support and services for civil aviation; and connectivity solutions. In addition, the company designs, operates, and delivers satellite-based systems for telecommunications, navigation, earth observation, environmental management, exploration, and science and orbital infrastructures; signaling, communications and supervision, and fare collection management systems and related services; cybersecurity and railway digitalization systems; and main line rail, and urban and intermodal mobility solutions. Further, it provides solutions for various markets and applications, including radiology, radio frequency, microwave sources, training and simulation solutions, lasers, and microelectronics solutions for science, industry, space, defense, automotive, railways, and energy conversion platforms. The company was formerly known as Thomson-CSF and changed its name to Thales S.A. in 2000. Thales S.A. was founded in 1893 and is headquartered in Meudon, France.

About Rheinmetall

Rheinmetall AG provides mobility and security technologies worldwide. The company operates in five segments: Vehicle Systems, Weapon and Ammunition, Electronic Solutions, Sensors and Actuators, and Materials and Trade. The Vehicle Systems segment offers combat, logistics, support, and special vehicles, including armored tracked vehicles, CBRN protection systems, artillery, turret systems, and wheeled logistics and tactical vehicles. The Weapon and Ammunition segment provides firepower and protection solutions, such as weapons and munition, protection systems, propellants and international projects and services. The Electronic Solutions segment offers a chain of systems network, such as sensors, networking platforms, automated connected effectors for soldiers, and cyberspace protection solutions, and training and simulation solutions. Its products include air defense systems; soldier systems; command, control, and reconnaissance systems; fire control systems; sensors; and simulations for the army, air force, navy, and civil applications. The Sensors and Actuators segment provides a portfolio of products comprising exhaust gas recirculation systems; throttle valves, control dampers, and exhaust flaps for electromotors; solenoid valves; actuators and valve train systems; oil, water, and vacuum pumps for passenger cars, commercial vehicles, and light and heavy-duty off-road applications; and industrial solutions. The Materials and Trade segment develops system components for the basic motors, such as engine blocks, structural components, and cylinder heads; plain bearings, and bushes; and replacement parts. It also engages in the aftermarket activities. The company was formerly known as Rheinmetall Berlin AG and changed its name to Rheinmetall AG in 1996. Rheinmetall AG was founded in 1889 and is headquartered in Düsseldorf, Germany.