Financial Contrast: Orbital ATK (OA) & Aerojet Rocketdyne (AJRD)

Orbital ATK (NYSE: OA) and Aerojet Rocketdyne (NYSE:AJRD) are both mid-cap aerospace companies, but which is the superior business? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, profitability, analyst recommendations, earnings and valuation.

Profitability

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This table compares Orbital ATK and Aerojet Rocketdyne’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Orbital ATK 6.50% 18.32% 6.55%
Aerojet Rocketdyne -0.49% 47.43% 2.44%

Dividends

Orbital ATK pays an annual dividend of $1.28 per share and has a dividend yield of 1.0%. Aerojet Rocketdyne does not pay a dividend. Orbital ATK pays out 20.4% of its earnings in the form of a dividend. Orbital ATK has increased its dividend for 2 consecutive years.

Valuation and Earnings

This table compares Orbital ATK and Aerojet Rocketdyne’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Orbital ATK $4.76 billion 1.61 $310.00 million $6.28 21.15
Aerojet Rocketdyne $1.88 billion 1.22 -$9.20 million $0.74 41.15

Orbital ATK has higher revenue and earnings than Aerojet Rocketdyne. Orbital ATK is trading at a lower price-to-earnings ratio than Aerojet Rocketdyne, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Orbital ATK and Aerojet Rocketdyne, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Orbital ATK 0 9 1 0 2.10
Aerojet Rocketdyne 0 1 2 0 2.67

Orbital ATK presently has a consensus target price of $122.58, indicating a potential downside of 7.73%. Aerojet Rocketdyne has a consensus target price of $37.50, indicating a potential upside of 23.15%. Given Aerojet Rocketdyne’s stronger consensus rating and higher probable upside, analysts clearly believe Aerojet Rocketdyne is more favorable than Orbital ATK.

Risk and Volatility

Orbital ATK has a beta of -0.27, meaning that its share price is 127% less volatile than the S&P 500. Comparatively, Aerojet Rocketdyne has a beta of 1.02, meaning that its share price is 2% more volatile than the S&P 500.

Institutional & Insider Ownership

80.6% of Orbital ATK shares are held by institutional investors. Comparatively, 97.8% of Aerojet Rocketdyne shares are held by institutional investors. 1.2% of Orbital ATK shares are held by company insiders. Comparatively, 3.2% of Aerojet Rocketdyne shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Aerojet Rocketdyne beats Orbital ATK on 9 of the 17 factors compared between the two stocks.

Orbital ATK Company Profile

Orbital ATK, Inc. develops and produces aerospace and defense related products to the U.S. Government, allied nations, prime contractors, and other customers in the United States and internationally. It operates through three segments: Flight Systems Group, Defense Systems Group, and Space Systems Group. The Flight Systems Group segment develops launch vehicles that are used as small-and medium-class space launch vehicles to place satellites into Earth orbit and escape trajectories; interceptor and target vehicles for missile defense systems; suborbital launch vehicles that place payloads into various high-altitude trajectories; rocket propulsion systems for human and cargo launch vehicles; strategic missiles; missile defense interceptors and target vehicles; and composite structures for military and commercial aircraft and launch structures markets. The Defense Systems Group segment develops and produces military ammunition; propulsion systems for tactical missiles and missile defense applications; strike weapons; precision weapons and munitions; high-performance gun systems; aircraft survivability systems; fuzes and warheads; propellant and energetic materials; special mission aircraft; airborne missile warning systems; and defense electronics. The Space Systems Group segment offers small-and medium-class satellites that are used to enable global and regional communications and broadcasting; conduct space-related scientific research; and perform activities related to national security. This segment also provides human-rated space systems for Earth-orbit and deep-space exploration, including re-supplying the international space station; and spacecraft components and subsystems, as well as specialized engineering and operations services. Orbital ATK, Inc. is headquartered in Dulles, Virginia.

Aerojet Rocketdyne Company Profile

Aerojet Rocketdyne Holdings, Inc. designs, develops, manufactures, and sells aerospace and defense products and systems in the United States. The company operates through two segments, Aerospace and Defense, and Real Estate. The Aerospace and Defense segment offers aerospace and defense products and systems for the United States government, including the Department of Defense, the National Aeronautics and Space Administration, and aerospace and defense prime contractors. This segment provides propulsion systems, such as liquid, solid, air-breathing, and electric propulsion systems for space, defense, civil, and commercial applications; and armament systems for precision tactical and missile defense propulsion, tactical missile propulsion, and hypersonic propulsion systems. The Real Estate segment engages in the re-zoning, entitlement, sale, and leasing of the company's excess real estate assets. It owns 11,451 acres of land adjacent to the United States Highway 50 between Rancho Cordova and Folsom, California east of Sacramento. The company was formerly known as GenCorp Inc. and changed its name to Aerojet Rocketdyne Holdings, Inc. in April 2015. Aerojet Rocketdyne Holdings, Inc. was founded in 1915 and is headquartered in El Segundo, California.

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