Critical Review: L-3 Communications Holdings (LLL) versus Its Peers

L-3 Communications Holdings (NYSE: LLL) is one of 45 publicly-traded companies in the “Aerospace & Defense” industry, but how does it compare to its rivals? We will compare L-3 Communications Holdings to similar businesses based on the strength of its dividends, institutional ownership, analyst recommendations, valuation, risk, earnings and profitability.

Dividends

L-3 Communications Holdings pays an annual dividend of $3.00 per share and has a dividend yield of 1.6%. L-3 Communications Holdings pays out 41.3% of its earnings in the form of a dividend. As a group, “Aerospace & Defense” companies pay a dividend yield of 1.5% and pay out 38.0% of their earnings in the form of a dividend. L-3 Communications Holdings has increased its dividend for 13 consecutive years.

Analyst Recommendations

This is a summary of current recommendations and price targets for L-3 Communications Holdings and its rivals, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
L-3 Communications Holdings 0 5 4 1 2.60
L-3 Communications Holdings Competitors 478 2125 2351 84 2.41

L-3 Communications Holdings presently has a consensus target price of $193.89, indicating a potential upside of 2.53%. As a group, “Aerospace & Defense” companies have a potential upside of 3.85%. Given L-3 Communications Holdings’ rivals higher possible upside, analysts plainly believe L-3 Communications Holdings has less favorable growth aspects than its rivals.

Insider & Institutional Ownership

79.1% of L-3 Communications Holdings shares are held by institutional investors. Comparatively, 70.3% of shares of all “Aerospace & Defense” companies are held by institutional investors. 2.9% of L-3 Communications Holdings shares are held by company insiders. Comparatively, 7.1% of shares of all “Aerospace & Defense” companies 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 & Risk

L-3 Communications Holdings has a beta of 1.15, suggesting that its share price is 15% more volatile than the S&P 500. Comparatively, L-3 Communications Holdings’ rivals have a beta of 1.06, suggesting that their average share price is 6% more volatile than the S&P 500.

Profitability

This table compares L-3 Communications Holdings and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
L-3 Communications Holdings 5.22% 14.00% 5.59%
L-3 Communications Holdings Competitors -4.87% 24.22% 3.94%

Earnings & Valuation

This table compares L-3 Communications Holdings and its rivals gross revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
L-3 Communications Holdings $10.90 billion $1.32 billion 26.01
L-3 Communications Holdings Competitors $8.68 billion $1.21 billion 80.76

L-3 Communications Holdings has higher revenue and earnings than its rivals. L-3 Communications Holdings is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Summary

L-3 Communications Holdings beats its rivals on 9 of the 15 factors compared.

L-3 Communications Holdings Company Profile

L3 Technologies, Inc., formerly L-3 Communications Holdings, Inc., is a prime contractor in Intelligence, Surveillance and Reconnaissance (ISR) systems, aircraft sustainment, simulation and training, night vision and image intensification equipment and security and detection systems. The Company provides a broad range of communication and electronic systems and products used on military and commercial platforms. It operates through four segments: Electronic Systems, Aerospace Systems, Communication Systems and Sensor Systems. Electronic Systems provides a broad range of products and services for military and commercial customers in several niche markets across several business areas. Aerospace Systems delivers integrated solutions and provides engineering, modernization, upgrade, sustainment, and maintenance and logistics support. Communication Systems delivers products and services for the global communications market. Sensor Systems provides diverse sensor technologies.

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