Analyzing Bae Systems (OTCMKTS:BAESY) and Elbit Systems (NASDAQ:ESLT)

Bae Systems (OTCMKTS:BAESY) and Elbit Systems (NASDAQ:ESLT) are both large-cap aerospace companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, valuation, profitability, dividends, risk and analyst recommendations.

Volatility & Risk

Bae Systems has a beta of 0.24, suggesting that its share price is 76% less volatile than the S&P 500. Comparatively, Elbit Systems has a beta of 0.33, suggesting that its share price is 67% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Bae Systems and Elbit Systems, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bae Systems	1	1	4	0	2.50
Elbit Systems	0	1	1	0	2.50

Elbit Systems has a consensus price target of $530.00, indicating a potential upside of 4.33%. Given Elbit Systems’ higher possible upside, analysts clearly believe Elbit Systems is more favorable than Bae Systems.

Insider & Institutional Ownership

0.2% of Bae Systems shares are held by institutional investors. Comparatively, 17.9% of Elbit Systems shares are held by institutional investors. 0.8% of Elbit Systems shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Bae Systems pays an annual dividend of $2.16 per share and has a dividend yield of 1.9%. Elbit Systems pays an annual dividend of $2.00 per share and has a dividend yield of 0.4%. Elbit Systems pays out 22.7% of its earnings in the form of a dividend. Elbit Systems has increased its dividend for 1 consecutive years.

Valuation and Earnings

This table compares Bae Systems and Elbit Systems”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bae Systems	$28.48 billion	2.93	$2.50 billion	N/A	N/A
Elbit Systems	$6.83 billion	3.31	$321.14 million	$8.81	57.66

Bae Systems has higher revenue and earnings than Elbit Systems.

Profitability

This table compares Bae Systems and Elbit Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bae Systems	N/A	N/A	N/A
Elbit Systems	5.35%	14.29%	4.30%

Summary

Elbit Systems beats Bae Systems on 9 of the 14 factors compared between the two stocks.

About Bae Systems

BAE Systems plc provides defense, aerospace, and security solutions worldwide. The company operates through five segments: Electronic Systems, Platforms & Services, Air, Maritime, and Cyber & Intelligence. The Electronic Systems segment offers electronic warfare systems, navigation systems, electro-optical sensors, military and commercial digital engine and flight controls, precision guidance and seeker solutions, military communication systems and data links, persistent surveillance capabilities, space electronics, and electric drive propulsion systems. The Cyber & Intelligence segment provides solutions to modernize, maintain, and test cyber-harden aircraft, radars, missile systems, and mission applications that detect and deter threats to national security; systems engineering, integration, and sustainment services for critical weapons systems, C5ISR, and cyber security; and solutions and services to intelligence and federal/civilian agencies. It also offers data intelligence solutions to protect nations, businesses, and citizens. The Platforms & Services segment manufactures, and upgrades combat vehicles, weapons, and munitions, as well as provides naval ship repair services and the management of government-owned ammunition plants. The Air segment develops future combat air systems and falconworks. The Maritime segment provides maritime and land activities, including submarine, ship build, and support programmes. BAE Systems plc was founded in 1970 and is headquartered in Camberley, the United Kingdom.

About Elbit Systems

Elbit Systems Ltd. develops and supplies a portfolio of airborne, land, and naval systems and products for the defense, homeland security, and commercial aviation applications primarily in Israel. The company operates through Aerospace, C4I and Cyber, ISTAR and EW, Land, and Elbit Systems of America segments. It also offers military aircraft and helicopter systems; commercial aviation systems and aerostructures; unmanned aircraft systems; electro-optic, night vision, and countermeasures systems; naval systems; land vehicle systems; munitions, such as precision munitions for land, air, and sea applications; command, control, communications, computer, intelligence, surveillance and reconnaissance, and cyber systems; electronic warfare and signal intelligence systems; and other commercial activities. In addition, the company manufactures and sells data links and radio communication systems and equipment, and cyber intelligence, autonomous, and homeland security solutions. Further, it provides various electronic warfare and signal intelligence systems, and laser systems; armored vehicle and other platforms survivability and protection systems, artillery, and mortar systems, as well as provides various training and support services. Additionally, the company offers products and systems solutions to military, homeland security, medical instrumentation, and commercial aviation clients. It markets its systems and products as a prime contractor or subcontractor to various governments and companies. It also has operations in Israel, North America, Europe, Latin America, the Asia-Pacific, and internationally. The company was incorporated in 1966 and is based in Haifa, Israel.