Reviewing General Dynamics (NYSE:GD) and Rheinmetall (OTCMKTS:RNMBY)

Rheinmetall (OTCMKTS:RNMBY) and General Dynamics (NYSE:GD) are both large-cap industrials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, profitability, valuation, risk, dividends, analyst recommendations and institutional ownership.

Profitability

This table compares Rheinmetall and General Dynamics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rheinmetall	7.51%	23.98%	7.31%
General Dynamics	8.24%	17.60%	7.87%

Earnings and Valuation

This table compares Rheinmetall and General Dynamics”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rheinmetall	$11.24 billion	3.55	$787.45 million	$3.52	48.54
General Dynamics	$52.55 billion	1.87	$4.21 billion	$17.00	21.36

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

Analyst Recommendations

This is a summary of current recommendations and price targets for Rheinmetall and General Dynamics, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rheinmetall	1	2	5	0	2.50
General Dynamics	1	5	11	0	2.59

General Dynamics has a consensus price target of $408.94, indicating a potential upside of 12.64%. Given General Dynamics’ stronger consensus rating and higher probable upside, analysts plainly believe General Dynamics is more favorable than Rheinmetall.

Volatility and Risk

Rheinmetall has a beta of 0.21, meaning that its share price is 79% less volatile than the S&P 500. Comparatively, General Dynamics has a beta of 0.3, meaning that its share price is 70% less volatile than the S&P 500.

Dividends

Rheinmetall pays an annual dividend of $1.90 per share and has a dividend yield of 1.1%. General Dynamics pays an annual dividend of $6.36 per share and has a dividend yield of 1.8%. Rheinmetall pays out 54.0% of its earnings in the form of a dividend. General Dynamics pays out 37.4% 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. General Dynamics has raised its dividend for 34 consecutive years. General Dynamics is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

86.1% of General Dynamics shares are owned by institutional investors. 1.4% of General Dynamics shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

General Dynamics beats Rheinmetall on 14 of the 16 factors compared between the two stocks.

About Rheinmetall

Rheinmetall AG is a German technology group focused on defense and mobility. Its defense business develops and supplies military vehicles, weapons, ammunition, air-defense systems, sensors and electronic solutions for armed forces and government customers. The company also has a Power Systems business serving the automotive and industrial sectors. Its products include components and systems for vehicles and other applications, alongside technologies related to electrification and energy efficiency.

About General Dynamics

General Dynamics Corporation is an aerospace and defense company that develops and manufactures products and provides services for commercial, government and military customers. Its businesses span aerospace, marine systems, combat systems and defense technologies. The company makes Gulfstream business jets and provides aircraft services. Its marine systems operations design and build submarines and surface ships, while its combat systems business produces military vehicles, weapons systems and munitions.