Contrasting Elbit Systems (ESLT) and Spirit AeroSystems (SPR)

Elbit Systems (NASDAQ: ESLT) and Spirit AeroSystems (NYSE:SPR) are both mid-cap aerospace companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, earnings, analyst recommendations, profitability, institutional ownership, valuation and risk.

Dividends

Elbit Systems pays an annual dividend of $1.32 per share and has a dividend yield of 1.2%. Spirit AeroSystems pays an annual dividend of $0.40 per share and has a dividend yield of 0.5%. Elbit Systems pays out 20.6% of its earnings in the form of a dividend. Spirit AeroSystems pays out 7.5% 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.

Valuation and Earnings

This table compares Elbit Systems and Spirit AeroSystems’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Elbit Systems $3.38 billion 1.42 $239.10 million $6.41 17.46
Spirit AeroSystems $6.98 billion 1.38 $354.90 million $5.35 15.75

Spirit AeroSystems has higher revenue and earnings than Elbit Systems. Spirit AeroSystems is trading at a lower price-to-earnings ratio than Elbit Systems, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

11.6% of Elbit Systems shares are held by institutional investors. Comparatively, 96.9% of Spirit AeroSystems shares are held by institutional investors. 0.8% of Elbit Systems shares are held by company insiders. Comparatively, 0.9% of Spirit AeroSystems shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

Elbit Systems has a beta of 0.89, indicating that its stock price is 11% less volatile than the S&P 500. Comparatively, Spirit AeroSystems has a beta of 1.49, indicating that its stock price is 49% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Elbit Systems and Spirit AeroSystems, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Elbit Systems 0 1 0 0 2.00
Spirit AeroSystems 1 4 13 0 2.67

Spirit AeroSystems has a consensus target price of $98.56, indicating a potential upside of 16.95%. Given Spirit AeroSystems’ stronger consensus rating and higher probable upside, analysts clearly believe Spirit AeroSystems is more favorable than Elbit Systems.

Profitability

This table compares Elbit Systems and Spirit AeroSystems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Elbit Systems 7.08% 16.45% 5.94%
Spirit AeroSystems 4.82% 35.11% 11.27%

Summary

Spirit AeroSystems beats Elbit Systems on 11 of the 16 factors compared between the two stocks.

Elbit Systems Company Profile

Elbit Systems Ltd. develops and supplies a range of airborne, land, and naval systems and products for defense, homeland security, and commercial aviation applications worldwide. The company offers military aircraft and helicopter systems; commercial aviation systems and aero structures; unmanned aircraft systems and unmanned surface vessels; electro-optic and countermeasures systems; land vehicle systems; command, control, communications, computer, and intelligence systems; electronic warfare and signal intelligence systems; and commercial cyber security products. It also provides medical diagnostic equipment, automotive night vision enhancement equipment, and smart glasses for sports applications; and super capacitor energy sources and fuel cells for transportation applications, as well as a range of support services. The company markets its systems and products as a prime contractor or subcontractor to various government and defense and homeland security contractors. Elbit Systems Ltd. was founded in 1966 and is based in Haifa, Israel.

Spirit AeroSystems Company Profile

Spirit AeroSystems Holdings, Inc., through its subsidiaries, designs, manufactures, and supplies commercial aero structures worldwide. It operates through three segments: Fuselage Systems, Propulsion Systems, and Wing Systems. The Fuselage Systems segment develops, produces, and markets forward, mid, and rear fuselage sections and systems primarily to aircraft original equipment manufacturers (OEMs); and offers related spares and maintenance, repairs, and overhaul (MRO) services. The Propulsion Systems segment offers struts/pylons; nacelles, including thrust reversers; and related engine structural components primarily to aircraft or engine OEMs, as well as related spares and MRO services. The Wing Systems provides wings and wing components, such as flight control surfaces; and other miscellaneous structural parts primarily to aircraft OEMs, as well as related spares and MRO services. It also offers low observables comprising radar absorbent and translucent materials; rotorcrafts that include forward cockpits and cabins; and other military services, which comprise fabrication, bonding, assembly, testing, tooling, processing, engineering analysis, and training. The company was formerly known as Mid-Western Aircraft Systems Holdings, Inc. Spirit AeroSystems Holdings, Inc. was founded in 1927 and is headquartered in Wichita, Kansas.

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