Financial Survey: Esterline Technologies (ESL) and Keysight Technologies (KEYS)

Esterline Technologies (NYSE: ESL) and Keysight Technologies (NYSE:KEYS) are both aerospace companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, valuation, earnings, dividends, institutional ownership, risk and analyst recommendations.

Insider & Institutional Ownership

94.6% of Esterline Technologies shares are owned by institutional investors. Comparatively, 88.5% of Keysight Technologies shares are owned by institutional investors. 1.3% of Esterline Technologies shares are owned by insiders. Comparatively, 1.0% of Keysight Technologies shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Esterline Technologies and Keysight Technologies, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Esterline Technologies 4 5 0 0 1.56
Keysight Technologies 0 1 8 0 2.89

Esterline Technologies currently has a consensus target price of $79.25, suggesting a potential upside of 6.52%. Keysight Technologies has a consensus target price of $59.50, suggesting a potential downside of 0.20%. Given Esterline Technologies’ higher possible upside, research analysts clearly believe Esterline Technologies is more favorable than Keysight Technologies.

Profitability

This table compares Esterline Technologies and Keysight Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Esterline Technologies 2.74% 6.08% 3.52%
Keysight Technologies 2.88% 19.18% 7.70%

Earnings & Valuation

This table compares Esterline Technologies and Keysight Technologies’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Esterline Technologies $2.00 billion 1.09 $111.55 million $4.36 17.06
Keysight Technologies $3.19 billion 3.51 $102.00 million $2.23 26.74

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

Risk and Volatility

Esterline Technologies has a beta of 1.25, suggesting that its share price is 25% more volatile than the S&P 500. Comparatively, Keysight Technologies has a beta of 1.06, suggesting that its share price is 6% more volatile than the S&P 500.

Summary

Keysight Technologies beats Esterline Technologies on 8 of the 14 factors compared between the two stocks.

About Esterline Technologies

Esterline Technologies Corporation designs, manufactures, and markets engineered products and systems primarily for aerospace and defense customers in the United States and internationally. It operates through three segments: Avionics & Controls, Sensors & Systems, and Advanced Materials. The Avionics & Controls segment offers global positioning systems, head-up displays, enhanced vision systems, and electronic flight management systems for control and display applications; lighted push-button and rotary switches, keyboards, lighted indicators, panels, and displays; and control sticks, grips, wheels, and switching systems. This segment also provides military personal communication equipment, primarily headsets, handsets, and field communications equipment; keyboards, keypads, and input devices that integrate cursor control devices, barcode scanners, displays, video, and voice activation and touch screens; and instruments for point-of-use and point-of-care diagnostics. The Sensors & Systems segment develops and manufactures high-precision temperature, pressure, and speed sensors; electrical interconnection systems; electrical power switching, control and data communication devices, and other related systems; and planet probe interconnectors, launcher umbilicals, and composite connectors. The Advanced Materials segment develops and manufactures silicone rubber and other elastomer products, such as clamping devices, thermal fire barrier insulation products, sealing systems, and tubing and coverings; lightweight metallic insulation systems; thermal protection products; and molded fiber cartridge cases, mortar increments, igniter tubes, and other combustible ordnance components. The company markets and sells its products through direct internal sales, manufacturer representatives, and distributors. Esterline Technologies Corporation was founded in 1967 and is headquartered in Bellevue, Washington.

About Keysight Technologies

Keysight Technologies, Inc. provides electronic design and test solutions to communications and electronics industries internationally. Its Communications Solutions Group segment provides radio frequency and microwave test instruments and related software, and electronic design automation (EDA) software tools; oscilloscopes, logic and serial protocol analyzers, logic-signal sources, arbitrary waveform generators, and bit error rate testers; optical modulation analyzers, component analyzers, power meters, and laser source products, as well as optical amplifier, filter, and other passive component solutions; and related software solutions. The company's Electronic Industrial Solutions Group segment offers design and design verification tools; and general purpose test and measurement products, such as digital multi-meters, function generators, waveform synthesizers, counters, data acquisition products, audio analyzers, LCR Meters, thermal imaging solutions, low-cost USB modular units, precision source measurement units, ultra-high precision device current analyzers, test executive software platforms, and a range of power supplies. This segment also offers comprehensive manufacturing systems, such as printed-circuit-board-assembly testers and IC parametric testers; and material analysis products that include atomic-force and scanning-electron microscopy products. Its Services Solutions Group segment provides repair, calibration, and consulting services; and remarkets used Keysight equipment, as well as asset tracking, servicing, and utilization requirements throughout the product life cycle. The company also offers start-up assistance, instrument productivity, and application services, as well as customization, consulting, and optimization services. Keysight Technologies, Inc. sells its products through direct sales force, distributors, resellers, and manufacturer's representatives. The company was incorporated in 2013 and is headquartered in Santa Rosa, California.

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