Nielsen N.V. (NLSN) and Leidos Holdings (LDOS) Financial Analysis

Leidos Holdings (NYSE: LDOS) and Nielsen N.V. (NYSE:NLSN) are both mid-cap aerospace companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, profitability, institutional ownership, risk, earnings, dividends and analyst recommendations.

Institutional and Insider Ownership

74.5% of Leidos Holdings shares are held by institutional investors. Comparatively, 95.0% of Nielsen N.V. shares are held by institutional investors. 1.7% of Leidos Holdings shares are held by company insiders. Comparatively, 1.2% of Nielsen N.V. 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.

Risk & Volatility

Leidos Holdings has a beta of 1.73, suggesting that its stock price is 73% more volatile than the S&P 500. Comparatively, Nielsen N.V. has a beta of 0.97, suggesting that its stock price is 3% less volatile than the S&P 500.

Dividends

Leidos Holdings pays an annual dividend of $1.28 per share and has a dividend yield of 2.3%. Nielsen N.V. pays an annual dividend of $1.36 per share and has a dividend yield of 3.3%. Leidos Holdings pays out 55.7% of its earnings in the form of a dividend. Nielsen N.V. pays out 99.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Leidos Holdings has raised its dividend for 3 consecutive years and Nielsen N.V. has raised its dividend for 3 consecutive years.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Leidos Holdings and Nielsen N.V., as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Leidos Holdings 0 1 7 0 2.88
Nielsen N.V. 0 7 6 0 2.46

Leidos Holdings currently has a consensus price target of $58.00, suggesting a potential upside of 2.33%. Nielsen N.V. has a consensus price target of $46.77, suggesting a potential upside of 14.66%. Given Nielsen N.V.’s higher probable upside, analysts clearly believe Nielsen N.V. is more favorable than Leidos Holdings.

Valuation and Earnings

This table compares Leidos Holdings and Nielsen N.V.’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Leidos Holdings $9.59 billion 0.89 $954.00 million $2.30 24.64
Nielsen N.V. $6.40 billion 2.27 $1.65 billion $1.37 29.77

Nielsen N.V. has higher revenue, but lower earnings than Leidos Holdings. Leidos Holdings is trading at a lower price-to-earnings ratio than Nielsen N.V., indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Leidos Holdings and Nielsen N.V.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Leidos Holdings 3.34% 17.35% 6.00%
Nielsen N.V. 7.68% 15.96% 4.33%

Summary

Leidos Holdings beats Nielsen N.V. on 9 of the 16 factors compared between the two stocks.

Leidos Holdings Company Profile

Leidos Holdings, Inc. (Leidos) is a science and technology solutions company focused on delivering solutions primarily in the areas of national security, health and engineering. The Company is a holding company whose direct 100%-owned subsidiary is Leidos, Inc., which delivers science and technology solutions in the areas of national security, health and engineering to agencies of the United States Department of Defense (DoD), the intelligence community, the United States Department of Homeland Security, and other United States Government civil agencies, state and local government agencies, foreign governments and customers across a variety of commercial markets. The Company’s segments include Health and Engineering and National Security Solutions. On September 27, 2013, Leidos completed the separation of its technical services and enterprise information technology services business into an independent, publicly traded company named Science Applications International Corporation.

Nielsen N.V. Company Profile

Nielsen N.V. (Nielsen), formerly Nielsen Holdings N.V., is an information and measurement company. The Company is engaged in providing clients with an understanding of consumers and consumer behavior. The Company delivers media and marketing information, and analytics on a global and local basis. Nielsen operates through two business segments: Buy and Watch. The Company’s Buy segment provides consumer purchasing measurement and analytics. Its Watch segment provides media audience measurement and analytics. Nielsen offers its clients the ability to activate in real-time Nielsen audience insights as well as various consumer segments from over 200 data providers. The Company offers its services to various clients, such as The Coca-Cola Company, NBC Universal, Nestle S.A., The Procter & Gamble Company, Twenty-First Century Fox Inc. and the Unilever Group.

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