Contrasting Orbital ATK (OA) & Lockheed Martin Corporation (NYSE:LMT)

Orbital ATK (NYSE: OA) and Lockheed Martin Corporation (NYSE:LMT) are both mid-cap aerospace companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, valuation, dividends, profitability, analyst recommendations, institutional ownership and risk.

Dividends

Orbital ATK pays an annual dividend of $1.28 per share and has a dividend yield of 1.2%. Lockheed Martin Corporation pays an annual dividend of $7.28 per share and has a dividend yield of 2.4%. Lockheed Martin Corporation pays out 42.5% of its earnings in the form of a dividend. Orbital ATK has increased its dividend for 14 consecutive years.

Earnings and Valuation

This table compares Orbital ATK and Lockheed Martin Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Orbital ATK $4.51 billion 1.36 $607.00 million N/A N/A
Lockheed Martin Corporation $49.05 billion 1.78 $6.23 billion $17.12 17.74

Lockheed Martin Corporation has higher revenue and earnings than Orbital ATK.

Insider and Institutional Ownership

86.4% of Orbital ATK shares are held by institutional investors. Comparatively, 79.7% of Lockheed Martin Corporation shares are held by institutional investors. 1.2% of Orbital ATK shares are held by insiders. Comparatively, 0.4% of Lockheed Martin Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Orbital ATK and Lockheed Martin Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Orbital ATK 6.11% 15.62% 5.38%
Lockheed Martin Corporation 10.37% 221.92% 7.97%

Analyst Ratings

This is a summary of current ratings and price targets for Orbital ATK and Lockheed Martin Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Orbital ATK 0 2 8 0 2.80
Lockheed Martin Corporation 0 8 8 0 2.50

Orbital ATK currently has a consensus target price of $103.53, suggesting a potential downside of 2.86%. Lockheed Martin Corporation has a consensus target price of $288.63, suggesting a potential downside of 4.98%. Given Orbital ATK’s stronger consensus rating and higher possible upside, equities analysts plainly believe Orbital ATK is more favorable than Lockheed Martin Corporation.

Risk and Volatility

Orbital ATK has a beta of -0.31, meaning that its stock price is 131% less volatile than the S&P 500. Comparatively, Lockheed Martin Corporation has a beta of 0.6, meaning that its stock price is 40% less volatile than the S&P 500.

Summary

Lockheed Martin Corporation beats Orbital ATK on 8 of the 15 factors compared between the two stocks.

About Orbital ATK

Orbital ATK, Inc. is an aerospace and defense systems company and supplier of related products to the United States Government, allied nations, prime contractors and other customers. The Company’s segments include Flight Systems Group, Defense Systems Group, Space Systems Group and Corporate. Its products include launch vehicles and related propulsion systems; satellites and associated components and services; tactical missiles, subsystems and defense electronics, and precision weapons, armament systems and ammunition. The Flight Systems Group segment consists of Launch Vehicles Division, Propulsion Systems Division and Aerospace Structures Division. The Defense Systems Group segment consists of Armament Systems Division, Defense Electronic Division, Missile Products Division and Small Caliber Systems Division. The Space Systems Group consists of Commercial Satellites Division, Government Satellites Division, Space Components Division and Technical Services Division.

About Lockheed Martin Corporation

Lockheed Martin Corporation is a security and aerospace company. The Company operates through four segments. Aeronautics segment is engaged in the research, design, development, manufacture, integration, sustainment, support and upgrade of military aircraft, including combat and air mobility aircraft, unmanned air vehicles and related technologies. Missiles and Fire Control segment provides air and missile defense systems; fire control systems; manned and unmanned ground vehicles, and energy management solutions. Rotary and Mission Systems segment provides design, manufacture, service and support for a range of military and civil helicopters; mission systems and sensors for rotary and fixed-wing aircraft; simulation and training services, and unmanned systems and technologies, among others. Space Systems segment is engaged in the research and development, design, engineering and production of satellites, strategic and defensive missile systems and space transportation systems.

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