Head to Head Contrast: Rockwell Collins (COL) vs. Exelis (XLS)

Rockwell Collins (NYSE: COL) and Exelis (NYSE:XLS) are both mid-cap aerospace companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, analyst recommendations, earnings, risk, dividends, profitability and institutional ownership.

Dividends

Rockwell Collins pays an annual dividend of $1.32 per share and has a dividend yield of 1.0%. Exelis does not pay a dividend. Rockwell Collins pays out 27.6% of its earnings in the form of a dividend. Rockwell Collins has increased its dividend for 2 consecutive years.

Analyst Recommendations

This is a summary of current recommendations and price targets for Rockwell Collins and Exelis, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rockwell Collins 1 15 3 0 2.11
Exelis 0 0 0 0 N/A

Rockwell Collins presently has a consensus price target of $125.35, indicating a potential downside of 7.13%. Given Rockwell Collins’ higher probable upside, analysts plainly believe Rockwell Collins is more favorable than Exelis.

Profitability

This table compares Rockwell Collins and Exelis’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rockwell Collins 10.33% 22.00% 6.90%
Exelis 7.52% 18.51% 4.87%

Valuation & Earnings

This table compares Rockwell Collins and Exelis’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rockwell Collins $6.82 billion 3.24 $705.00 million $4.78 28.24
Exelis N/A N/A N/A $1.23 20.07

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

Insider and Institutional Ownership

72.2% of Rockwell Collins shares are owned by institutional investors. 1.1% of Rockwell Collins shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Rockwell Collins beats Exelis on 11 of the 12 factors compared between the two stocks.

Rockwell Collins Company Profile

Rockwell Collins, Inc. designs, produces and supports communications and aviation systems for commercial and military customers. The Company provides information management services through voice and data communication networks and solutions across the world. The Company operates through three segments: Commercial Systems, Government Systems and Information Management Services. The Commercial Systems segment supplies aviation electronics systems, products and services to customers located throughout the world. The Government Systems segment provides a range of electronic products, systems and services to customers including the United States Department of Defense, various ministries of defense, other government agencies and defense contractors around the world. The Information Management Services segment provides communications services, systems integration and security solutions across the aviation, airport, rail and nuclear security markets.

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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