Financial Review: RTX (NYSE:RTX) and Rocket Lab (NASDAQ:RKLB)

Rocket Lab (NASDAQ:RKLB) and RTX (NYSE:RTX) are both large-cap industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, valuation, institutional ownership, dividends, risk and profitability.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Rocket Lab and RTX, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rocket Lab	1	5	14	4	2.88
RTX	1	5	14	1	2.71

Rocket Lab presently has a consensus price target of $107.32, suggesting a potential upside of 66.20%. RTX has a consensus price target of $228.59, suggesting a potential upside of 18.23%. Given Rocket Lab’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Rocket Lab is more favorable than RTX.

Profitability

This table compares Rocket Lab and RTX’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rocket Lab	-21.51%	-6.48%	-4.92%
RTX	8.28%	13.99%	5.51%

Insider and Institutional Ownership

71.8% of Rocket Lab shares are owned by institutional investors. Comparatively, 86.5% of RTX shares are owned by institutional investors. 8.4% of Rocket Lab shares are owned by insiders. Comparatively, 0.1% of RTX shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

Rocket Lab has a beta of 2.6, suggesting that its stock price is 160% more volatile than the S&P 500. Comparatively, RTX has a beta of 0.29, suggesting that its stock price is 71% less volatile than the S&P 500.

Earnings and Valuation

This table compares Rocket Lab and RTX”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rocket Lab	$601.80 million	64.20	-$198.21 million	($0.27)	-239.15
RTX	$88.60 billion	2.94	$6.73 billion	$5.68	34.04

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

Summary

RTX beats Rocket Lab on 8 of the 14 factors compared between the two stocks.

About Rocket Lab

Rocket Lab USA, Inc., a space company, provides launch services and space systems solutions for the space and defense industries. The company provides launch services, spacecraft design services, spacecraft components, spacecraft manufacturing, and other spacecraft and on-orbit management solutions; and constellation management services, as well as designs and manufactures small and medium-class rockets. It also designs, manufactures, and sells Electron, a reusable orbital-class small rocket; and the Photon satellite platforms, as well as developing the Neutron 8-ton payload class launch vehicle; conducts remote launch activities; and designs and manufactures a range of components and subsystems for the Photon family of spacecraft and broader merchant spacecraft components. The company serves commercial, aerospace prime contractors, and government customers. Rocket Lab USA, Inc. was founded in 2006 and is headquartered in Long Beach, California.

About RTX

RTX Corporation, an aerospace and defense company, provides systems and services for the commercial, military, and government customers in the United States and internationally. It operates through three segments: Collins Aerospace, Pratt & Whitney, and Raytheon. The Collins Aerospace Systems segment offers aerospace and defense products, and aftermarket service solutions for civil and military aircraft manufacturers and commercial airlines, as well as regional, business, and general aviation, defense, and commercial space operations. This segment also designs, produces, and supports cabin interior, including oxygen systems, food and beverage preparation, storage and galley systems, and lavatory and wastewater management systems; battlespace, test and training range systems, crew escape systems, and simulation and training solutions; information management services; and aftermarket services that include spare parts, overhaul and repair, engineering and technical support, training and fleet management solutions, and asset and information management services. Its Pratt & Whitney segment supplies aircraft engines for commercial, military, business jet, and general aviation customers; and produces, sells, and services military and commercial auxiliary power units. The Raytheon segment provides defensive and offensive threat detection, tracking, and mitigation capabilities for U.S., foreign government, and commercial customers. The company was formerly known as Raytheon Technologies Corporation and changed its name to RTX Corporation in July 2023. RTX Corporation was incorporated in 1934 and is headquartered in Arlington, Virginia.