Comparing Harris (NYSE:HRS) & L3Harris (NYSE:LHX)

L3Harris (NYSE:LHX) and Harris (NYSE:HRS) are both large-cap aerospace companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, risk, profitability, institutional ownership, earnings, analyst recommendations and valuation.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for L3Harris and Harris, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
L3Harris 0 1 8 0 2.89
Harris 0 0 5 0 3.00

L3Harris presently has a consensus price target of $235.41, suggesting a potential upside of 12.31%. Harris has a consensus price target of $209.60, suggesting a potential upside of 13.32%. Given Harris’ stronger consensus rating and higher possible upside, analysts clearly believe Harris is more favorable than L3Harris.

Profitability

This table compares L3Harris and Harris’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
L3Harris 13.95% 29.27% 10.17%
Harris 13.60% 27.13% 9.36%

Dividends

L3Harris pays an annual dividend of $2.74 per share and has a dividend yield of 1.3%. Harris pays an annual dividend of $2.74 per share and has a dividend yield of 1.5%. L3Harris pays out 33.1% of its earnings in the form of a dividend. Harris pays out 42.2% 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. Harris has increased its dividend for 17 consecutive years. Harris is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares L3Harris and Harris’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
L3Harris $6.80 billion 3.64 $949.00 million $8.29 25.28
Harris $6.18 billion 3.53 $718.00 million $6.50 28.46

L3Harris has higher revenue and earnings than Harris. L3Harris is trading at a lower price-to-earnings ratio than Harris, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

94.9% of L3Harris shares are owned by institutional investors. Comparatively, 96.7% of Harris shares are owned by institutional investors. 2.5% of L3Harris shares are owned by insiders. Comparatively, 2.5% of Harris 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.

Risk and Volatility

L3Harris has a beta of 0.95, suggesting that its stock price is 5% less volatile than the S&P 500. Comparatively, Harris has a beta of 0.98, suggesting that its stock price is 2% less volatile than the S&P 500.

Summary

L3Harris beats Harris on 9 of the 16 factors compared between the two stocks.

About L3Harris

L3Harris Technologies, Inc. provides technology-based solutions that solve government and commercial customers' mission-critical challenges in the United States and internationally. The company operates in three segments: Communication Systems, Electronic Systems, and Space and Intelligence Systems. It designs, develops, and manufactures radio communications products and systems, including single channel ground and airborne radio systems, multiband manpack and handheld radios, multi-channel manpack and airborne radios, and single-channel airborne radios, as well as wideband rifleman team, ground, and high frequency manpack radios. The company also offers vision-enhancing products; wireless communications systems; and Internet protocol based voice and data communications systems, as well as single-band land mobile radio terminals and multiband radios comprising a handheld radio and a full-spectrum mobile radio for vehicles. In addition, it provides electronic warfare, avionics, command, control, communications, computers, intelligence, surveillance, and reconnaissance solutions for defense and classified customers; and mission-critical communication systems for civil and military aviation and other customers. Further, the company offers intelligence, space protection, geospatial, earth observation, exploration, positioning, navigation and timing, and environmental solutions using advanced sensors, antennas, and payloads, as well as ground processing and information analytics for national security, defense, civil and commercial customers. The company was formerly known as Harris Corporation and changed its name to L3Harris Technologies, Inc. in June 2019. L3Harris Technologies, Inc. was founded in 1895 and is headquartered in Melbourne, Florida.

About Harris

Harris Corporation provides technology-based solutions that solve government and commercial customers' mission-critical challenges in the United States and internationally. The company operates in three segments: Communication Systems, Electronic Systems, and Space and Intelligence Systems. It designs, develops, and manufactures radio communications products and systems, including single channel ground and airborne radio systems, multiband manpack and handheld radios, multi-channel manpack and airborne radios, and single-channel airborne radios, as well as wideband rifleman team, ground, and high frequency manpack radios. The company also offers vision-enhancing products; wireless communications systems; and Internet protocol based voice and data communications systems, as well as single-band land mobile radio terminals and multiband radios comprising a handheld radio and a full-spectrum mobile radio for vehicles. In addition, it provides electronic warfare, avionics, command, control, communications, computers, intelligence, surveillance, and reconnaissance solutions for defense and classified customers; and mission-critical communication systems for civil and military aviation and other customers. Further, the company offers intelligence, space protection, geospatial, earth observation, exploration, positioning, navigation and timing, and environmental solutions using advanced sensors, antennas, and payloads, as well as ground processing and information analytics for national security, defense, civil and commercial customers. Harris Corporation was founded in 1895 and is headquartered in Melbourne, Florida.

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