Comparing L3Harris Technologies (NYSE:LHX) and General Dynamics (NYSE:GD)

L3Harris Technologies (NYSE:LHX) and General Dynamics (NYSE:GD) are both large-cap aerospace companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, profitability, valuation, institutional ownership, dividends, risk and analyst recommendations.

Dividends

L3Harris Technologies pays an annual dividend of $4.80 per share and has a dividend yield of 1.8%. General Dynamics pays an annual dividend of $6.00 per share and has a dividend yield of 1.9%. L3Harris Technologies pays out 53.6% of its earnings in the form of a dividend. General Dynamics pays out 40.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. L3Harris Technologies has increased its dividend for 24 consecutive years and General Dynamics has increased its dividend for 34 consecutive years. General Dynamics is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

L3Harris Technologies has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500. Comparatively, General Dynamics has a beta of 0.48, meaning that its share price is 52% less volatile than the S&P 500.

Institutional and Insider Ownership

84.8% of L3Harris Technologies shares are held by institutional investors. Comparatively, 86.1% of General Dynamics shares are held by institutional investors. 0.7% of L3Harris Technologies shares are held by insiders. Comparatively, 1.5% of General Dynamics 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.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for L3Harris Technologies and General Dynamics, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
L3Harris Technologies	0	5	13	0	2.72
General Dynamics	1	12	9	0	2.36

L3Harris Technologies presently has a consensus price target of $279.4706, suggesting a potential upside of 3.63%. General Dynamics has a consensus price target of $315.7778, suggesting a potential upside of 0.57%. Given L3Harris Technologies’ stronger consensus rating and higher probable upside, analysts plainly believe L3Harris Technologies is more favorable than General Dynamics.

Profitability

This table compares L3Harris Technologies and General Dynamics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
L3Harris Technologies	7.94%	11.82%	5.47%
General Dynamics	8.13%	17.99%	7.21%

Valuation & Earnings

This table compares L3Harris Technologies and General Dynamics”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
L3Harris Technologies	$21.33 billion	2.37	$1.50 billion	$8.95	30.13
General Dynamics	$47.72 billion	1.77	$3.78 billion	$14.90	21.07

General Dynamics has higher revenue and earnings than L3Harris Technologies. General Dynamics is trading at a lower price-to-earnings ratio than L3Harris Technologies, indicating that it is currently the more affordable of the two stocks.

Summary

General Dynamics beats L3Harris Technologies on 11 of the 17 factors compared between the two stocks.

About L3Harris Technologies

L3Harris Technologies, Inc. provides mission-critical solutions for government and commercial customers worldwide. The company's Integrated Mission Systems segment provides intelligence, surveillance, and reconnaissance (ISR) systems, passive sensing and targeting, electronic attack, autonomy, power and communications, and networks and sensors, as well as advanced combat systems for air, land, and sea sectors. Its Space and Airborne Systems segment offers space payloads, sensors, and full-mission solutions; classified intelligence and cyber; mission avionics; electronic warfare systems; and mission networks systems for air traffic management operations. The company's Communication Systems segment provides broadband communications; tactical radios, software, satellite terminals, and end-to-end battlefield systems for the U.S. Department of Defense, international, federal, and state agency customers; integrated vision solutions, including helmet-mounted integrated night vision goggles with leading-edge image intensifier tubes and weapon-mounted sights, aiming lasers, and range finders; and public safety radios, and system applications and equipment. Its Aerojet Rocketdyne segment provides propulsion technologies and armament systems for strategic defense, missile defense, hypersonic, and tactical systems; and space propulsion and power systems for national security, and space and exploration missions. The company was formerly known as Harris Corporation and changed its name to L3Harris Technologies, Inc. in June 2019. L3Harris Technologies, Inc. was founded in 1895 and is based in Melbourne, Florida.

About General Dynamics

General Dynamics Corporation operates as an aerospace and defense company worldwide. It operates through four segments: Aerospace, Marine Systems, Combat Systems, and Technologies. The Aerospace segment produces and sells business jets; and offers aircraft maintenance and repair, management, aircraft-on-ground support and completion, charter, staffing, and fixed-base operator services. The Marine Systems segment designs and builds nuclear-powered submarines, surface combatants, and auxiliary ships for the United States Navy and Jones Act ships for commercial customers, as well as builds crude oil and product tankers, and container and cargo ships; provides maintenance, modernization, and lifecycle support services for navy ships; offers and program management, planning, engineering, and design support services for submarine construction programs. The Combat Systems segment manufactures land combat solutions, such as wheeled and tracked combat vehicles, Stryker wheeled combat vehicles, piranha vehicles, weapons systems, munitions, mobile bridge systems with payloads, tactical vehicles, main battle tanks, armored vehicles, and armaments; and offers modernization programs, engineering, support, and sustainment services. The Technologies segment provides information technology solutions and mission support services; mobile communication, computers, and command-and-control mission systems; intelligence, surveillance, and reconnaissance solutions to military, intelligence, and federal civilian customers; cloud computing, artificial intelligence; machine learning; big data analytics; development, security, and operations; and unmanned undersea vehicle manufacturing and assembly services. The company was founded in 1899 and is headquartered in Reston, Virginia.