Analyzing B/E Aerospace (BEAV) and Exelis (XLS)

B/E Aerospace (NASDAQ: BEAV) and Exelis (NYSE:XLS) are both industrials companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, profitability, institutional ownership, analyst recommendations, valuation, dividends and risk.

Profitability

This table compares B/E Aerospace and Exelis’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
B/E Aerospace 8.25% 94.11% 6.79%
Exelis 7.52% 18.51% 4.87%

Analyst Ratings

This is a breakdown of recent ratings and price targets for B/E Aerospace and Exelis, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
B/E Aerospace 0 2 0 0 2.00
Exelis 0 0 0 0 N/A

B/E Aerospace currently has a consensus price target of $61.50, suggesting a potential downside of 4.61%. Given B/E Aerospace’s higher possible upside, equities analysts plainly believe B/E Aerospace is more favorable than Exelis.

Valuation & Earnings

This table compares B/E Aerospace and Exelis’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
B/E Aerospace N/A N/A N/A $3.08 20.93
Exelis N/A N/A N/A $1.23 20.07

Exelis is trading at a lower price-to-earnings ratio than B/E Aerospace, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

92.0% of B/E Aerospace shares are held by institutional investors. 0.5% of B/E Aerospace shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

B/E Aerospace pays an annual dividend of $0.84 per share and has a dividend yield of 1.3%. Exelis does not pay a dividend. B/E Aerospace pays out 27.3% of its earnings in the form of a dividend.

Summary

B/E Aerospace beats Exelis on 9 of the 10 factors compared between the two stocks.

B/E Aerospace Company Profile

B/E Aerospace, Inc. is a manufacturer of cabin interior products for commercial aircraft and business jets. The Company sells its products and provides services directly to airlines and aerospace manufacturer. It operates through two segments. The Company manufactures aircraft seats, offering a selection of first class, business class, tourist class and regional aircraft seats. It manufactures and sells seats, which include the seat frame, cushions, armrests, tray table and a range of optional features, such as adjustable lumbar supports, electrical actuation systems, footrests, reading lights, head/neck supports and other comfort amenities. The business jet segment’s products include a range of business jet seating and sofa products, including electric fully berthing lie-flat seats, air valves and oxygen delivery systems as well as sidewalls, bulkheads, credenzas, closets, galley structures, lavatories, wastewater systems, de-icing systems, cabin management systems and tables.

Exelis Company Profile

Exelis Inc. (Exelis) is a diversified aerospace, defense, information and services company. The Company delivers mission-critical solutions to military, government and commercial customers in the United States and globally. It operates in two segments: Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance (C4ISR) Electronics and Systems, and Information and Technical Services. Its C4ISR Electronics and Systems segment provides engineered systems and solutions, including: ISR systems; integrated electronic warfare systems; radar and sonar systems; electronic attack and release systems; communications solutions; space systems, and composite aerostructures. The Company’s Information and Technical Services segment provides a range of service solutions: systems integration; network design and development; air traffic management; cyber; intelligence; advanced engineering, and space launch and range-support.

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