Head-To-Head Comparison: Vertiv (NYSE:VRT) vs. Leidos (NYSE:LDOS)

Vertiv (NYSE:VRT) and Leidos (NYSE:LDOS) are both large-cap computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, institutional ownership, profitability, earnings and risk.

Risk & Volatility

Vertiv has a beta of 1.77, meaning that its share price is 77% more volatile than the S&P 500. Comparatively, Leidos has a beta of 0.65, meaning that its share price is 35% less volatile than the S&P 500.

Dividends

Vertiv pays an annual dividend of $0.15 per share and has a dividend yield of 0.1%. Leidos pays an annual dividend of $1.60 per share and has a dividend yield of 0.9%. Vertiv pays out 7.2% of its earnings in the form of a dividend. Leidos pays out 15.1% 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. Vertiv has increased its dividend for 2 consecutive years and Leidos has increased its dividend for 6 consecutive years. Leidos is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Vertiv and Leidos”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vertiv	$8.01 billion	6.66	$495.80 million	$2.09	66.88
Leidos	$16.66 billion	1.36	$1.25 billion	$10.58	16.75

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

Institutional & Insider Ownership

89.9% of Vertiv shares are owned by institutional investors. Comparatively, 76.1% of Leidos shares are owned by institutional investors. 5.0% of Vertiv shares are owned by insiders. Comparatively, 0.7% of Leidos shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Vertiv and Leidos’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Vertiv	8.93%	51.64%	13.69%
Leidos	8.22%	33.57%	11.45%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Vertiv and Leidos, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vertiv	0	3	18	1	2.91
Leidos	0	7	7	1	2.60

Vertiv currently has a consensus target price of $144.0556, indicating a potential upside of 3.06%. Leidos has a consensus target price of $179.4615, indicating a potential upside of 1.26%. Given Vertiv’s stronger consensus rating and higher probable upside, research analysts clearly believe Vertiv is more favorable than Leidos.

Summary

Vertiv beats Leidos on 12 of the 17 factors compared between the two stocks.

About Vertiv

Vertiv Holdings Co, together with its subsidiaries, designs, manufactures, and services critical digital infrastructure technologies and life cycle services for data centers, communication networks, and commercial and industrial environments in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. It offers AC and DC power management products, switchgear and busbar products, thermal management products, integrated rack systems, modular solutions, and management systems for monitoring and controlling digital infrastructure that are integral to the technologies used for various services, including e-commerce, online banking, file sharing, video on-demand, energy storage, wireless communications, Internet of Things, and online gaming. The company also provides lifecycle management services, predictive analytics, and professional services for deploying, maintaining, and optimizing its products and their related systems; and preventative maintenance, acceptance testing, engineering and consulting, performance assessments, remote monitoring, training, spare parts, and digital critical infrastructure software services. It offers its products primarily under the Vertiv, Liebert, NetSure, Geist, E&I, Powerbar, and Avocent brands. The company serves cloud services, financial services, healthcare, transportation, manufacturing, energy, education, government, social media, and retail industries through a network of direct sales professionals, independent sales representatives, channel partners, and original equipment manufacturers. Vertiv Holdings Co is headquartered in Westerville, Ohio.

About Leidos

Leidos Holdings, Inc., together with its subsidiaries, provides services and solutions in the defense, intelligence, civil, and health markets in the United States and internationally. The company operates through Defense Solutions, Civil, and Health segments. The Defense Solutions segment offers national security solutions and systems for air, land, sea, space, and cyberspace for the U.S. Intelligence Community, the Department of Defense, the space development agency, the National Aeronautics and Space Administration, defense information systems agency, military services, and government agencies of U.S. allies abroad, as well as other federal and commercial customers in the national security industry. The solutions include technology, large-scale systems, command and control platforms, data analytics, logistics, and cybersecurity solutions, as well as intelligence analysis and operations support services to critical missions. The Civil segment provides systems integration services to air navigation service providers, including the federal aviation administration, the En route automation modernization, advanced technology oceanic procedure, time based flow management, terminal flight data management, geo-7, and future flight services, as well as enterprise-information display systems; and security detection services. It also offers information technology (IT) solutions in cloud computing, mobility, application modernization, DevOps, data center, network modernization, asset management, help desk operations, and digital workplace enablement; and environment, energy, and infrastructure services. The Health segment offers solutions to federal and commercial customers responsible for health and well-being of people, include health information management, managed health, digital modernization, and life sciences research and development services. Leidos Holdings, Inc. was founded in 1969 and is headquartered in Reston, Virginia.