L3 Technologies (NYSE: LLL) and QUALCOMM (NASDAQ:QCOM) are both large-cap aerospace companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.

Institutional & Insider Ownership

80.4% of L3 Technologies shares are owned by institutional investors. Comparatively, 76.9% of QUALCOMM shares are owned by institutional investors. 2.9% of L3 Technologies shares are owned by company insiders. Comparatively, 0.2% of QUALCOMM shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility and Risk

L3 Technologies has a beta of 1.23, suggesting that its share price is 23% more volatile than the S&P 500. Comparatively, QUALCOMM has a beta of 1.51, suggesting that its share price is 51% more volatile than the S&P 500.

Valuation and Earnings

This table compares L3 Technologies and QUALCOMM’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
L3 Technologies $9.57 billion 1.66 $677.00 million $8.47 23.97
QUALCOMM $22.29 billion 3.92 $2.47 billion $3.78 15.58

QUALCOMM has higher revenue and earnings than L3 Technologies. QUALCOMM is trading at a lower price-to-earnings ratio than L3 Technologies, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations and price targets for L3 Technologies and QUALCOMM, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
L3 Technologies 0 2 8 1 2.91
QUALCOMM 1 12 8 0 2.33

L3 Technologies presently has a consensus target price of $227.40, suggesting a potential upside of 12.00%. QUALCOMM has a consensus target price of $63.44, suggesting a potential upside of 7.69%. Given L3 Technologies’ stronger consensus rating and higher possible upside, analysts plainly believe L3 Technologies is more favorable than QUALCOMM.

Dividends

L3 Technologies pays an annual dividend of $3.20 per share and has a dividend yield of 1.6%. QUALCOMM pays an annual dividend of $2.48 per share and has a dividend yield of 4.2%. L3 Technologies pays out 37.8% of its earnings in the form of a dividend. QUALCOMM pays out 65.6% 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. L3 Technologies has increased its dividend for 14 consecutive years and QUALCOMM has increased its dividend for 7 consecutive years.

Profitability

This table compares L3 Technologies and QUALCOMM’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
L3 Technologies 6.94% 13.74% 5.60%
QUALCOMM -20.16% 16.48% 7.00%

Summary

L3 Technologies beats QUALCOMM on 10 of the 17 factors compared between the two stocks.

L3 Technologies Company Profile

L3 Technologies, Inc. provides aerospace systems, communication, electronic, and sensor systems used on military, homeland security, and commercial platforms in the United States and internationally. It offers simulation and training, night vision and image intensification equipment, and security and detection systems; and components, products, subsystems, and systems, as well as related services to military and commercial customers in various business areas, such as total training solutions, power and propulsion systems, aviation products, precision engagement systems, and security and detection systems. The company also provides fleet management support services, procurement, systems integration, sensor development, modifications, and periodic depot maintenance services; modernization and life extension maintenance upgrade and support services; aircraft fabrication and assembly of fixed and rotary wing aero structures, as well as avionics hardware and software systems; and prime mission systems integration and sensor development services. In addition, it offers network and communication systems, secure communications products, radio frequency components, satellite communication terminals and space, microwave and telemetry products, and secure data links. Further, the company provides multi-domain intelligence, surveillance, and reconnaissance mission solutions in various business areas, including space and sensor, airborne sensor, warrior sensor, maritime sensor, and intelligence and mission systems, as well as in advanced programs. It serves the United States (U.S.) Department of Defense and its prime contractors, the U.S. Government intelligence agencies, the U.S. Department of Homeland Security, foreign governments, and commercial customers. The company was formerly known as L-3 Communications Holdings, Inc. and changed its name to L3 Technologies, Inc. in December 2016. L3 Technologies, Inc. was founded in 1997 and is headquartered in New York, New York.

QUALCOMM Company Profile

QUALCOMM Incorporated designs, develops, manufactures, and markets digital communication products worldwide. It operates through three segments: Qualcomm CDMA Technologies (QCT); Qualcomm Technology Licensing (QTL); and Qualcomm Strategic Initiatives (QSI). The QCT segment develops and supplies integrated circuits and system software based on code division multiple access (CDMA), orthogonal frequency division multiple access, and other technologies for use in wireless voice and data communications, networking, application processing, multimedia, and global positioning system products. The QTL segment grants licenses or provides rights to use portions of its intellectual property portfolio, which include various patent rights useful in the manufacture and sale of wireless products comprising products implementing CDMA2000, wideband CDMA, CDMA time division duplex, and/or long term evolution standards and their derivatives. The QSI segment invests in early-stage companies in various industries, including automotive, Internet of things, mobile, data center, and healthcare for supporting the design and introduction of new products and services for voice and data communications, and new industry segments. The company also provides products and services for mobile health; products designed for the implementation of small cells; development, and other services and related products to the United States government agencies and their contractors; and software products, and content and push-to-talk enablement services to wireless operators. In addition, it licenses chipset technology, and products and services for use in data centers. QUALCOMM Incorporated was founded in 1985 and is headquartered in San Diego, California.

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