Financial Review: DigitalGlobe (DGI) versus Lockheed Martin (LMT)

DigitalGlobe (NYSE: DGI) and Lockheed Martin (NYSE:LMT) are both mid-cap industrials companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, institutional ownership, earnings, valuation and dividends.

Profitability

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

Net Margins Return on Equity Return on Assets
DigitalGlobe 0.64% 2.40% 0.97%
Lockheed Martin 7.31% 221.41% 7.65%

Institutional & Insider Ownership

93.9% of DigitalGlobe shares are owned by institutional investors. Comparatively, 78.8% of Lockheed Martin shares are owned by institutional investors. 1.9% of DigitalGlobe shares are owned by insiders. Comparatively, 0.4% of Lockheed Martin shares are owned 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.

Dividends

Lockheed Martin pays an annual dividend of $8.00 per share and has a dividend yield of 2.5%. DigitalGlobe does not pay a dividend. Lockheed Martin pays out 64.4% of its earnings in the form of a dividend. DigitalGlobe has raised its dividend for 14 consecutive years.

Earnings and Valuation

This table compares DigitalGlobe and Lockheed Martin’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
DigitalGlobe $725.40 million 0.00 $26.50 million $0.02 N/A
Lockheed Martin $47.25 billion 1.93 $5.30 billion $12.43 25.59

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

Analyst Recommendations

This is a summary of current ratings and recommmendations for DigitalGlobe and Lockheed Martin, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DigitalGlobe 0 3 1 0 2.25
Lockheed Martin 0 4 8 0 2.67

DigitalGlobe presently has a consensus target price of $35.83, suggesting a potential upside of Infinity. Lockheed Martin has a consensus target price of $322.83, suggesting a potential upside of 1.51%. Given DigitalGlobe’s higher possible upside, equities research analysts clearly believe DigitalGlobe is more favorable than Lockheed Martin.

Summary

Lockheed Martin beats DigitalGlobe on 9 of the 15 factors compared between the two stocks.

About DigitalGlobe

DigitalGlobe, Inc. is a provider of Earth imagery, data and analysis. The Company’s imagery solutions and other services support a range of uses, including mission-planning, mapping and analysis, environmental monitoring, oil and gas exploration and infrastructure management. The Company’s imagery solutions and other services are sourced from its own satellite constellation and third-party providers. The Company sells its products and services through a combination of direct and indirect channels, consisting of a global network of resellers, strategic partners and direct enterprise sales to its United States Government and Diversified Commercial customer groups. The Company offers products consisting of imagery from its constellation of satellites, and provides geospatial products and services. The Company processes its imagery to varying levels according to its customers’ specifications and delivers its products using the distribution method.

About Lockheed Martin

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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