Leonardo DRS (NASDAQ:DRS) versus Arrow Electronics (NYSE:ARW) Head to Head Contrast

Leonardo DRS (NASDAQ:DRS – Get Rating) and Arrow Electronics (NYSE:ARW – Get Rating) are both aerospace companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, valuation, profitability and risk.

Institutional and Insider Ownership

61.4% of Leonardo DRS shares are held by institutional investors. Comparatively, 95.5% of Arrow Electronics shares are held by institutional investors. 1.0% of Leonardo DRS shares are held by company insiders. Comparatively, 1.0% of Arrow Electronics shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility and Risk

Leonardo DRS has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500. Comparatively, Arrow Electronics has a beta of 1.4, suggesting that its stock price is 40% more volatile than the S&P 500.

Valuation and Earnings

This table compares Leonardo DRS and Arrow Electronics’ top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Leonardo DRS	$2.69 billion	0.25	$25.07 million	$1.92	6.93
Arrow Electronics	$34.48 billion	0.24	$1.11 billion	$21.38	6.20

Arrow Electronics has higher revenue and earnings than Leonardo DRS. Arrow Electronics is trading at a lower price-to-earnings ratio than Leonardo DRS, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Leonardo DRS and Arrow Electronics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Leonardo DRS	39.19%	4.94%	2.80%
Arrow Electronics	3.93%	27.82%	7.52%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Leonardo DRS and Arrow Electronics, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Leonardo DRS	0	0	2	0	3.00
Arrow Electronics	1	3	1	0	2.00

Leonardo DRS currently has a consensus target price of $19.00, indicating a potential upside of 42.75%. Arrow Electronics has a consensus target price of $125.50, indicating a potential downside of 5.29%. Given Leonardo DRS’s stronger consensus rating and higher probable upside, equities analysts clearly believe Leonardo DRS is more favorable than Arrow Electronics.

Summary

Arrow Electronics beats Leonardo DRS on 7 of the 13 factors compared between the two stocks.

About Leonardo DRS

(Get Rating)

Leonardo DRS, Inc. engages in the provision of defense products and technologies. It develops and manufactures defense products for the U.S. military, intelligence agencies and allies around the world. Its broad technology portfolio focuses on advanced sensing, network computing, force protection, and electrical power and propulsion, as well as a range of key defense priorities. The company operates through two segments: Advanced Sensors & Computing, and Integrated Mission Systems. The Advanced Sensors & Computing segment has been aligned to push towards a more autonomous future. It consists of six business units, which include Airborne & Intelligence Systems, Daylight Solutions, DRS RADA Technologies, Electro-Optical & Infrared Systems, Land Electronics, and Naval Electronics. The Integrated Mission Systems segment consists of both a ground vehicle integrator and naval power and propulsion system provider. Leonardo DRS was founded by Leonard Newman and David E. Gross in 1969 and is headquartered in Arlington, VA.

About Arrow Electronics

(Get Rating)

Arrow Electronics, Inc. is a provider of products, services, and solutions to industrial and commercial users of electronic components and enterprise computing solutions. It operates through two segments: Global Components Business and Global Enterprise Computing Solutions. The Global Components segment is involved in the marketing and distribution of electronic components and provides a range of value-added capabilities throughout the entire life cycle of technology products and services through design engineering, global marketing, and integration, global logistics and supply chain management. The Global Enterprise Computing Solutions segment provides computing solutions and services which include datacenter, cloud, security, and analytics solutions. The company was founded by Robert W. Wentworth and John C. Waddell in 1946 and is headquartered in Centennial, CO.