Orbital ATK (NYSE: OA) and United Technologies (NYSE:UTX) are both aerospace companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, analyst recommendations, valuation, institutional ownership, risk, earnings and dividends.
This is a summary of recent ratings and recommmendations for Orbital ATK and United Technologies, as provided by MarketBeat.
||Strong Buy Ratings
Orbital ATK presently has a consensus target price of $122.58, suggesting a potential downside of 7.41%. United Technologies has a consensus target price of $137.82, suggesting a potential upside of 8.38%. Given United Technologies’ stronger consensus rating and higher probable upside, analysts clearly believe United Technologies is more favorable than Orbital ATK.
Orbital ATK pays an annual dividend of $1.28 per share and has a dividend yield of 1.0%. United Technologies pays an annual dividend of $2.80 per share and has a dividend yield of 2.2%. Orbital ATK pays out 23.9% of its earnings in the form of a dividend. United Technologies pays out 49.1% 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. Orbital ATK has increased its dividend for 2 consecutive years and United Technologies has increased its dividend for 6 consecutive years. United Technologies is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility and Risk
Orbital ATK has a beta of -0.24, suggesting that its stock price is 124% less volatile than the S&P 500. Comparatively, United Technologies has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500.
Insider & Institutional Ownership
80.6% of Orbital ATK shares are held by institutional investors. Comparatively, 81.9% of United Technologies shares are held by institutional investors. 1.2% of Orbital ATK shares are held by company insiders. Comparatively, 0.2% of United Technologies shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
This table compares Orbital ATK and United Technologies’ net margins, return on equity and return on assets.
||Return on Equity
||Return on Assets
Valuation and Earnings
This table compares Orbital ATK and United Technologies’ revenue, earnings per share (EPS) and valuation.
||Earnings Per Share
United Technologies has higher revenue and earnings than Orbital ATK. United Technologies is trading at a lower price-to-earnings ratio than Orbital ATK, indicating that it is currently the more affordable of the two stocks.
United Technologies beats Orbital ATK on 12 of the 17 factors compared between the two stocks.
Orbital ATK Company Profile
Orbital ATK, Inc. develops and produces aerospace and defense related products to the U.S. Government, allied nations, prime contractors, and other customers in the United States and internationally. It operates through three segments: Flight Systems Group, Defense Systems Group, and Space Systems Group. The Flight Systems Group segment develops launch vehicles that are used as small-and medium-class space launch vehicles to place satellites into Earth orbit and escape trajectories; interceptor and target vehicles for missile defense systems; suborbital launch vehicles that place payloads into various high-altitude trajectories; rocket propulsion systems for human and cargo launch vehicles; strategic missiles; missile defense interceptors and target vehicles; and composite structures for military and commercial aircraft and launch structures markets. The Defense Systems Group segment develops and produces military ammunition; propulsion systems for tactical missiles and missile defense applications; strike weapons; precision weapons and munitions; high-performance gun systems; aircraft survivability systems; fuzes and warheads; propellant and energetic materials; special mission aircraft; airborne missile warning systems; and defense electronics. The Space Systems Group segment offers small-and medium-class satellites that are used to enable global and regional communications and broadcasting; conduct space-related scientific research; and perform activities related to national security. This segment also provides human-rated space systems for Earth-orbit and deep-space exploration, including re-supplying the international space station; and spacecraft components and subsystems, as well as specialized engineering and operations services. Orbital ATK, Inc. is headquartered in Dulles, Virginia.
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.
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