Financial Survey: BWX Technologies (NYSE:BWXT) vs. Leonardo DRS (NASDAQ:DRS)

Leonardo DRS (NASDAQ:DRS) and BWX Technologies (NYSE:BWXT) are both industrials companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, profitability and valuation.

Institutional & Insider Ownership

18.8% of Leonardo DRS shares are held by institutional investors. Comparatively, 94.4% of BWX Technologies shares are held by institutional investors. 0.3% of Leonardo DRS shares are held by insiders. Comparatively, 0.6% of BWX Technologies shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Leonardo DRS and BWX Technologies, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Leonardo DRS	0	2	3	2	3.00
BWX Technologies	0	5	10	1	2.75

Leonardo DRS currently has a consensus price target of $53.17, suggesting a potential upside of 46.85%. BWX Technologies has a consensus price target of $208.33, suggesting a potential upside of 44.95%. Given Leonardo DRS’s stronger consensus rating and higher possible upside, research analysts plainly believe Leonardo DRS is more favorable than BWX Technologies.

Dividends

Leonardo DRS pays an annual dividend of $0.36 per share and has a dividend yield of 1.0%. BWX Technologies pays an annual dividend of $1.08 per share and has a dividend yield of 0.8%. Leonardo DRS pays out 30.3% of its earnings in the form of a dividend. BWX Technologies pays out 28.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. BWX Technologies has increased its dividend for 2 consecutive years.

Volatility and Risk

Leonardo DRS has a beta of 0.32, indicating that its stock price is 68% less volatile than the S&P 500. Comparatively, BWX Technologies has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500.

Valuation and Earnings

This table compares Leonardo DRS and BWX Technologies”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Leonardo DRS	$3.65 billion	2.65	$278.00 million	$1.19	30.42
BWX Technologies	$3.51 billion	3.75	$328.95 million	$3.86	37.23

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

Profitability

This table compares Leonardo DRS and BWX Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Leonardo DRS	8.52%	12.97%	8.29%
BWX Technologies	10.11%	30.83%	9.34%

Summary

BWX Technologies beats Leonardo DRS on 13 of the 18 factors compared between the two stocks.

About Leonardo DRS

Leonardo DRS, Inc., together with its subsidiaries, provides defense electronic products and systems, and military support services. It operates through Advanced Sensing and Computing (ASC) segment, and Integrated Mission Systems (IMS) segments. The ASC segment designs, develops, and manufacture sensing and network computing technology that enables real-time situational awareness required for enhanced operational decision making and execution; and offers sensing capabilities span applications, such as missions requiring advanced detection, precision targeting and surveillance sensing, long range electro-optic/infrared, signals intelligence, and other intelligence systems including electronic warfare, ground vehicle sensing, active electronically scanned array tactical radars, dismounted soldier, and space sensing. This segment also provides network computing, which are utilized across a range of mission applications including platform computing on ground and shipboard for advanced battle management, combat systems, radar, command and control, tactical networks, tactical computing, and communications. The IMS segment designs, develops, manufacture, and integrates power conversion, control, and distribution systems, ship propulsion systems, motors and variable frequency drives, force protection systems, transportation, and logistics systems for the U.S. and allied defense customers. This segment also offers electrical propulsion systems, which includes power conversion, control, distribution, and propulsion systems, as well as power dense permanent magnet motors, energy storage systems and associated efficient, rugged, and compact power conversion, electrical actuation systems, as well as cooling technologies; and motor controllers, instrumentation and control equipment, electrical actuation systems, and thermal management systems. The company was incorporated in 1968 and is based in Arlington, Virginia. Leonardo DRS, Inc. operates as a subsidiary of Leonardo S.p.A.

About BWX Technologies

BWX Technologies, Inc., together with its subsidiaries, manufactures and sells nuclear components in the United States, Canada, and internationally. It operates through two segments, Government Operations and Commercial Operations. The Government Operations segment designs and manufactures naval nuclear components, reactors, and nuclear fuel; fabrication activities; and supplies proprietary and sole-source valves, manifolds, and fittings to naval and commercial shipping customers. This segment also involved in manufacture of close-tolerance and equipment for nuclear applications; down blend government stockpiles of uranium; receives, stores, characterizes, dissolves, recovers, and purifies uranium-bearing materials; and supplies research reactor fuel elements for colleges, universities, and national laboratories, as well as components for defense applications. The Commercial Operations segment designs and manufactures commercial nuclear steam generators, heat exchangers, pressure vessels, and reactor components; and other auxiliary equipment, including containers for the storage of nuclear fuel and other high-level nuclear waste. This segment also offers nuclear fuel, fuel handling systems, tooling delivery systems, nuclear grade materials, and precisely machined components, and related services for CANDU nuclear power plants; provides in-plant inspection, maintenance, and modification services, as well as non-destructive examination and tooling/repair solutions; and manufactures medical radioisotopes, radiopharmaceuticals, and medical devices. The company was formerly known as The Babcock & Wilcox Company and changed its name to BWX Technologies, Inc. in June 2015. BWX Technologies, Inc. was founded in 1867 and is headquartered in Lynchburg, Virginia.