Financial Review: Arrow Electronics (NYSE:ARW) & Leonardo DRS (NASDAQ:DRS)

Arrow Electronics (NYSE:ARWGet Rating) and Leonardo DRS (NASDAQ:DRSGet Rating) are both computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, valuation, earnings, profitability, institutional ownership and dividends.

Volatility & Risk

Arrow Electronics has a beta of 1.37, meaning that its stock price is 37% more volatile than the S&P 500. Comparatively, Leonardo DRS has a beta of 0.79, meaning that its stock price is 21% less volatile than the S&P 500.

Profitability

This table compares Arrow Electronics and Leonardo DRS’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Arrow Electronics 3.93% 27.82% 7.52%
Leonardo DRS 39.19% 4.94% 2.80%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Arrow Electronics and Leonardo DRS, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Arrow Electronics 1 2 1 0 2.00
Leonardo DRS 0 0 1 0 3.00

Arrow Electronics currently has a consensus target price of $127.00, indicating a potential upside of 11.54%. Leonardo DRS has a consensus target price of $19.00, indicating a potential upside of 44.05%. Given Leonardo DRS’s stronger consensus rating and higher possible upside, analysts plainly believe Leonardo DRS is more favorable than Arrow Electronics.

Earnings and Valuation

This table compares Arrow Electronics and Leonardo DRS’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Arrow Electronics $34.48 billion 0.20 $1.11 billion $21.38 5.33
Leonardo DRS $117.24 million 5.60 $25.07 million $1.92 6.87

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

Institutional and Insider Ownership

95.5% of Arrow Electronics shares are held by institutional investors. Comparatively, 61.4% of Leonardo DRS shares are held by institutional investors. 1.0% of Arrow Electronics shares are held by insiders. Comparatively, 1.0% of Leonardo DRS 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.

Summary

Arrow Electronics beats Leonardo DRS on 7 of the 12 factors compared between the two stocks.

About Arrow Electronics

(Get Rating)

Arrow Electronics, Inc. provides products, services, and solutions to industrial and commercial users of electronic components and enterprise computing solutions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company operates in two segments, Global Components and Global Enterprise Computing Solutions. The Global Components segment markets and distributes semiconductor products and related services; passive, electro-mechanical, and interconnect products, including capacitors, resistors, potentiometers, power supplies, relays, switches, and connectors; and computing and memory products, as well as other products and services. The Global Enterprise Computing Solutions segment offers computing solutions, such as datacenter, cloud, security, and analytics solutions. This segment provides access to various services, including engineering and integration support, warehousing and logistics, marketing resources, and authorized hardware and software training. The company serves original equipment manufacturers, value-added resellers, managed service providers, contract manufacturers, and other commercial customers. Arrow Electronics, Inc. was founded in 1935 and is based in Centennial, Colorado.

About Leonardo DRS

(Get Rating)

Leonardo DRS, Inc., together with its subsidiaries, provides defense products and technologies in the land, air, sea, space, cyber and security, and commercial domains for military applications. It operates in two segments, Advanced Sensing and Computing, and Integrated Mission Systems. The company offers advanced sensor technologies, including infrared systems and sensors for threat detection and situational awareness; uncooled infrared systems and brownout solutions; airborne, ground vehicle mounted, and dismounted soldier electronic warfare (EW) systems; and EW software and training systems, and intelligence solutions. It also provides computing systems for ground vehicles, ships, and submarines; network and data distribution applications; sensor systems; and networked computing infrastructure on military platform. In addition, the company offers force protection systems, such as solutions for counter-unmanned aerial systems, short-range air defense systems, and active protection systems; and power control, distribution, conversion, and propulsion systems, as well as hybrid electric drive propulsion systems, energy storage, gas turbine packages, nuclear instrumentation and controls, and thermal management and refrigeration equipment. It serves the U.S. military, aerospace and defense prime contractors, government intelligence agencies, and international military customers. The company was founded in 1969 and is based in Arlington, Virginia. Leonardo DRS, Inc. operates as a subsidiary of Leonardo S.p.a.

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