Head-To-Head Contrast: RTX (NYSE:RTX) vs. Textron (NYSE:TXT)

RTX (NYSE:RTX) and Textron (NYSE:TXT) are both large-cap aerospace companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, analyst recommendations, earnings, dividends and profitability.

Analyst Ratings

This is a breakdown of current ratings and target prices for RTX and Textron, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RTX	0	5	13	3	2.90
Textron	0	6	6	0	2.50

RTX currently has a consensus price target of $158.87, suggesting a potential downside of 1.69%. Textron has a consensus price target of $92.67, suggesting a potential upside of 12.00%. Given Textron’s higher possible upside, analysts clearly believe Textron is more favorable than RTX.

Profitability

This table compares RTX and Textron’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RTX	7.35%	12.89%	4.93%
Textron	5.80%	14.26%	6.12%

Volatility & Risk

RTX has a beta of 0.67, meaning that its stock price is 33% less volatile than the S&P 500. Comparatively, Textron has a beta of 1.14, meaning that its stock price is 14% more volatile than the S&P 500.

Valuation & Earnings

This table compares RTX and Textron”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RTX	$80.74 billion	2.68	$4.77 billion	$4.55	35.51
Textron	$13.70 billion	1.08	$824.00 million	$4.42	18.72

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

Institutional and Insider Ownership

86.5% of RTX shares are owned by institutional investors. Comparatively, 86.0% of Textron shares are owned by institutional investors. 0.2% of RTX shares are owned by company insiders. Comparatively, 1.7% of Textron shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

RTX pays an annual dividend of $2.72 per share and has a dividend yield of 1.7%. Textron pays an annual dividend of $0.08 per share and has a dividend yield of 0.1%. RTX pays out 59.8% of its earnings in the form of a dividend. Textron pays out 1.8% 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. RTX has raised its dividend for 5 consecutive years. RTX is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

RTX beats Textron on 12 of the 18 factors compared between the two stocks.

About RTX

RTX Corporation, an aerospace and defense company, provides systems and services for the commercial, military, and government customers in the United States and internationally. It operates through three segments: Collins Aerospace, Pratt & Whitney, and Raytheon. The Collins Aerospace Systems segment offers aerospace and defense products, and aftermarket service solutions for civil and military aircraft manufacturers and commercial airlines, as well as regional, business, and general aviation, defense, and commercial space operations. This segment also designs, produces, and supports cabin interior, including oxygen systems, food and beverage preparation, storage and galley systems, and lavatory and wastewater management systems; battlespace, test and training range systems, crew escape systems, and simulation and training solutions; information management services; and aftermarket services that include spare parts, overhaul and repair, engineering and technical support, training and fleet management solutions, and asset and information management services. Its Pratt & Whitney segment supplies aircraft engines for commercial, military, business jet, and general aviation customers; and produces, sells, and services military and commercial auxiliary power units. The Raytheon segment provides defensive and offensive threat detection, tracking, and mitigation capabilities for U.S., foreign government, and commercial customers. The company was formerly known as Raytheon Technologies Corporation and changed its name to RTX Corporation in July 2023. RTX Corporation was incorporated in 1934 and is headquartered in Arlington, Virginia.

About Textron

Textron Inc. operates in the aircraft, defense, industrial, and finance businesses worldwide. It operates through six segments: Textron Aviation, Bell, Textron Systems, Industrial, Textron eAviation, and Finance. The Textron Aviation segment manufactures, sells, and services business jets, turboprop and piston engine aircraft, and military trainer and defense aircraft; and offers maintenance, inspection, and repair services, as well as sells commercial parts. The Bell segment supplies military and commercial helicopters, tiltrotor aircrafts, and related spare parts and services. The Textron Systems segment offers unmanned aircraft systems, electronic systems and solutions, advanced marine crafts, piston aircraft engines, live military air-to-air and air-to-ship training, weapons and related components, and armored and specialty vehicles. The Industrial segment offers blow-molded solutions, including conventional plastic fuel tanks and pressurized fuel tanks for hybrid vehicle applications, clear-vision systems, plastic tanks for catalytic reduction systems, and battery housing systems for use in electric vehicles primarily to automobile original equipment manufacturers (OEMs); and golf cars, off-road utility vehicles, powersports products, light transportation vehicles, aviation ground support equipment, professional turf-maintenance equipment, and turf-care vehicles to golf courses and resorts, government agencies and municipalities, consumers, outdoor enthusiasts, and commercial and industrial users. The Textron eAviation segment manufactures and sells light aircraft and gliders with electric and combustion engines; and provides other research and development initiatives related to sustainable aviation solutions. The Finance segment offers financing services to purchase new and pre-owned aviation aircraft and Bell helicopters. Textron Inc. was founded in 1923 and is headquartered in Providence, Rhode Island.