Analyzing Northrop Grumman (NYSE:NOC) & Safran (OTCMKTS:SAFRY)

Northrop Grumman (NYSE:NOC) and Safran (OTCMKTS:SAFRY) are both large-cap aerospace companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, risk, dividends and earnings.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Northrop Grumman and Safran, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Northrop Grumman	0	8	7	1	2.56
Safran	0	2	2	1	2.80

Northrop Grumman presently has a consensus target price of $550.00, suggesting a potential upside of 6.42%. Given Northrop Grumman’s higher possible upside, research analysts clearly believe Northrop Grumman is more favorable than Safran.

Institutional & Insider Ownership

83.4% of Northrop Grumman shares are owned by institutional investors. Comparatively, 0.1% of Safran shares are owned by institutional investors. 0.2% of Northrop Grumman shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Northrop Grumman and Safran’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Northrop Grumman	9.19%	25.46%	7.79%
Safran	N/A	N/A	N/A

Risk and Volatility

Northrop Grumman has a beta of 0.15, suggesting that its share price is 85% less volatile than the S&P 500. Comparatively, Safran has a beta of 1.29, suggesting that its share price is 29% more volatile than the S&P 500.

Dividends

Northrop Grumman pays an annual dividend of $9.24 per share and has a dividend yield of 1.8%. Safran pays an annual dividend of $0.55 per share and has a dividend yield of 0.7%. Northrop Grumman pays out 36.5% of its earnings in the form of a dividend. Northrop Grumman has increased its dividend for 22 consecutive years. Northrop Grumman is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Northrop Grumman and Safran”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Northrop Grumman	$41.03 billion	1.81	$4.17 billion	$25.34	20.40
Safran	$30.47 billion	4.52	-$721.76 million	N/A	N/A

Northrop Grumman has higher revenue and earnings than Safran.

Summary

Northrop Grumman beats Safran on 11 of the 15 factors compared between the two stocks.

About Northrop Grumman

Northrop Grumman Corporation operates as an aerospace and defense technology company in the United States, Asia/Pacific, Europe, and internationally. The company’s Aeronautics Systems segment designs, develops, manufactures, integrates, and sustains aircraft systems. This segment also offers unmanned autonomous aircraft systems, including high-altitude long-endurance strategic ISR systems and vertical take-off and landing tactical ISR systems; and strategic long-range strike aircraft, tactical fighter and air dominance aircraft, and airborne battle management and command and control systems. Its Defense Systems segment designs, develops, integrates, and produces tactical weapons and missile defense solutions, and provides sustainment, modernization, and training services for manned and unmanned aircraft and electronics systems. It also offers integrated, all-domain command, and control battle management systems, precision strike weapons; high speed air-breathing and hypersonic systems; high-performance gun systems, ammunition, precision munitions and advanced fuzes; aircraft and mission systems logistics support, sustainment, operations and modernization; and warfighter training services. The company’s Mission Systems segment offers command, control, communications and computers, intelligence, surveillance, and reconnaissance systems; radar, electro-optical/infrared and acoustic sensors; electronic warfare systems; advanced communications and network systems; cyber solutions; intelligence processing systems; navigation; and maritime power, propulsion, and payload launch systems. Its Space Systems segment offers satellites, spacecraft systems, subsystems, sensors, and payloads; ground systems; missile defense systems and interceptors; launch vehicles and related propulsion systems; and strategic missiles. Northrop Grumman Corporation was founded in 1939 and is based in Falls Church, Virginia.

About Safran

Safran SA, together with its subsidiaries, engages in the aerospace and defense businesses worldwide. The company operates through three segments: Aerospace Propulsion; Aircraft Equipment, Defense and Aerosystems; and Aircraft Interiors. The Aerospace Propulsion segment designs, develops, produces, and markets propulsion and mechanical power transmission systems for commercial aircraft, military transport, training and combat aircraft, civil and military helicopters, satellites, and drones; and offers maintenance, repair, and overhaul (MRO) services, as well as sells spare parts. The Aircraft Equipment, Defense and Aerosystems segment provides landing gears and brakes; nacelles and reversers; avionics, such as flight controls and onboard information systems; security systems, including evacuation slides and oxygen masks; onboard computers and fuel systems; electrical power management systems and related engineering services; and optronic equipment and sights, navigation equipment and sensors, infantry, and drones, as well as offers MRO services and sells spare parts. The Aircraft Interiors segment designs, develops, manufactures, and markets aircraft seats for passengers and crew; cabin equipment, overhead bins, class dividers, passenger service units, cabin interior solutions, chilling systems, galleys, electrical inserts, and trolleys and cargo equipment; and cabin and passenger solutions, such as water distribution equipment, lavatories, air systems, and in-flight entertainment and connectivity systems. Its products and services are used in civil and military aircraft, and helicopters. Safran SA was founded in 1896 and is based in Paris, France.