Analyzing Textron (TXT) and Aerojet Rocketdyne Holdings (AJRD)

Textron (NYSE: TXT) and Aerojet Rocketdyne Holdings (NYSE:AJRD) are both aerospace companies, but which is the better business? We will compare the two companies based on the strength of their profitabiliy, risk, institutional ownership, earnings, valuation, dividends and analyst recommendations.

Profitability

This table compares Textron and Aerojet Rocketdyne Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Textron 6.67% 12.53% 4.50%
Aerojet Rocketdyne Holdings 1.04% -408.10% 2.44%

Dividends

Textron pays an annual dividend of $0.08 per share and has a dividend yield of 0.2%. Aerojet Rocketdyne Holdings does not pay a dividend. Textron pays out 2.4% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Textron and Aerojet Rocketdyne Holdings, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Textron 1 3 6 0 2.50
Aerojet Rocketdyne Holdings 0 0 2 0 3.00

Textron currently has a consensus price target of $51.22, indicating a potential upside of 6.49%. Aerojet Rocketdyne Holdings has a consensus price target of $25.50, indicating a potential upside of 21.26%. Given Aerojet Rocketdyne Holdings’ stronger consensus rating and higher probable upside, analysts plainly believe Aerojet Rocketdyne Holdings is more favorable than Textron.

Valuation and Earnings

This table compares Textron and Aerojet Rocketdyne Holdings’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Textron $13.68 billion 0.94 $1.53 billion $3.35 14.36
Aerojet Rocketdyne Holdings $1.81 billion 0.87 $159.30 million $0.25 84.12

Textron has higher revenue and earnings than Aerojet Rocketdyne Holdings. Textron is trading at a lower price-to-earnings ratio than Aerojet Rocketdyne Holdings, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

82.7% of Textron shares are owned by institutional investors. Comparatively, 93.3% of Aerojet Rocketdyne Holdings shares are owned by institutional investors. 1.1% of Textron shares are owned by insiders. Comparatively, 2.7% of Aerojet Rocketdyne Holdings shares are owned by 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.

Risk & Volatility

Textron has a beta of 1.55, suggesting that its share price is 55% more volatile than the S&P 500. Comparatively, Aerojet Rocketdyne Holdings has a beta of 1.51, suggesting that its share price is 51% more volatile than the S&P 500.

Summary

Textron beats Aerojet Rocketdyne Holdings on 10 of the 16 factors compared between the two stocks.

Textron Company Profile

Textron Inc. is a multi-industry company engaged in aircraft, defense, industrial and finance businesses to provide customers with products and services across the world. The Company operates through five segments: Textron Aviation, Bell, Textron Systems, Industrial and Finance. The Textron Aviation segment is engaged in general aviation. The Bell segment supplies military helicopters and support to the United States Government and to military customers outside the United States. The Textron Systems segment is a supplier to the defense, aerospace and general aviation markets. The Industrial segment designs and manufactures a range of products within three product lines: fuel systems and functional components, specialized vehicles and equipment, and tools and test equipment. The Finance segment is a commercial finance business that consists of Textron Financial Corporation (TFC) and its subsidiaries.

Aerojet Rocketdyne Holdings Company Profile

GenCorp Inc., incorporated in 1915, is a manufacturer of aerospace and defense products and systems with a real estate segment that includes activities related to the re-zoning, entitlement, sale, and leasing of its excess real estate assets. The Company develops and manufactures propulsion systems for defense and space applications, and armaments for precision tactical and long range weapon systems applications. The Company operates in two segments: Aerospace and Defense, and Real Estate. Its defense system products include liquid, solid, and air-breathing propulsion systems and components. Its space system products include liquid, solid, and electric propulsion systems and components. In June 2013, United Technologies Corp announced it has closed on the sale of substantially all operations of its Pratt & Whitney Rocketdyne unit to GenCorp Inc.

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