Contrasting Boeing (NYSE:BA) & Lockheed Martin (NYSE:LMT)

Lockheed Martin (NYSE:LMT) and Boeing (NYSE:BA) are both large-cap aerospace companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, earnings, risk, dividends, valuation, analyst recommendations and profitability.

Dividends

Lockheed Martin pays an annual dividend of $13.80 per share and has a dividend yield of 2.8%. Boeing pays an annual dividend of $8.22 per share and has a dividend yield of 3.8%. Lockheed Martin pays out 77.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Boeing pays out -49.8% of its earnings in the form of a dividend. Lockheed Martin has increased its dividend for 22 consecutive years. Boeing is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

Lockheed Martin has a beta of 0.28, suggesting that its stock price is 72% less volatile than the S&P 500. Comparatively, Boeing has a beta of 1.47, suggesting that its stock price is 47% more volatile than the S&P 500.

Earnings and Valuation

This table compares Lockheed Martin and Boeing”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lockheed Martin	$71.84 billion	1.62	$5.34 billion	$17.76	28.11
Boeing	$75.33 billion	2.15	-$11.82 billion	($16.51)	-12.97

Lockheed Martin has higher earnings, but lower revenue than Boeing. Boeing is trading at a lower price-to-earnings ratio than Lockheed Martin, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent recommendations for Lockheed Martin and Boeing, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lockheed Martin	1	15	6	1	2.30
Boeing	3	2	17	3	2.80

Lockheed Martin currently has a consensus price target of $510.29, suggesting a potential upside of 2.23%. Boeing has a consensus price target of $240.20, suggesting a potential upside of 12.20%. Given Boeing’s stronger consensus rating and higher possible upside, analysts clearly believe Boeing is more favorable than Lockheed Martin.

Profitability

This table compares Lockheed Martin and Boeing’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lockheed Martin	5.85%	107.60%	12.13%
Boeing	-14.18%	N/A	-7.78%

Institutional & Insider Ownership

74.2% of Lockheed Martin shares are held by institutional investors. Comparatively, 64.8% of Boeing shares are held by institutional investors. 0.1% of Lockheed Martin shares are held by insiders. Comparatively, 0.1% of Boeing shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

About Lockheed Martin

Lockheed Martin Corporation, a security and aerospace company, engages in the research, design, development, manufacture, integration, and sustainment of technology systems, products, and services worldwide. The company operates through Aeronautics, Missiles and Fire Control, Rotary and Mission Systems, and Space segments. The Aeronautics segment offers combat and air mobility aircraft, unmanned air vehicles, and related technologies. The Missiles and Fire Control segment provides air and missile defense systems; tactical missiles and air-to-ground precision strike weapon systems; logistics; fire control systems; mission operations support, readiness, engineering support, and integration services; manned and unmanned ground vehicles; and energy management solutions. The Rotary and Mission Systems segment offers military and commercial helicopters, surface ships, sea and land-based missile defense systems, radar systems, sea and air-based mission and combat systems, command and control mission solutions, cyber solutions, and simulation and training solutions. The Space segment offers satellites; space transportation systems; strategic, advanced strike, and defensive systems; and classified systems and services in support of national security systems. This segment also provides network-enabled situational awareness and integrates space and ground global systems to help its customers gather, analyze, and securely distribute critical intelligence data. It serves primarily serves the U.S. government, as well as foreign military sales contracted through the U.S. government. The company was founded in 1912 and is based in Bethesda, Maryland.

About Boeing

The Boeing Company, together with its subsidiaries, designs, develops, manufactures, sells, services, and supports commercial jetliners, military aircraft, satellites, missile defense, human space flight and launch systems, and services worldwide. The company operates through Commercial Airplanes; Defense, Space & Security; and Global Services segments. The Commercial Airplanes segment develops, produces, and markets commercial jet aircraft for passenger and cargo requirements, as well as provides fleet support services. The Defense, Space & Security segment engages in the research, development, production, and modification of manned and unmanned military aircraft and weapons systems; strategic defense and intelligence systems, which include strategic missile and defense systems, command, control, communications, computers, intelligence, surveillance and reconnaissance, cyber and information solutions, and intelligence systems; and satellite systems, such as government and commercial satellites, and space exploration. The Global Services segment offers products and services, including supply chain and logistics management, engineering, maintenance and modifications, upgrades and conversions, spare parts, pilot and maintenance training systems and services, technical and maintenance documents, and data analytics and digital services to commercial and defense customers. The Boeing Company was incorporated in 1916 and is based in Arlington, Virginia.