Head to Head Analysis: Saab (OTCMKTS:SAABY) vs. BWX Technologies (NYSE:BWXT)

Saab (OTCMKTS:SAABY) and BWX Technologies (NYSE:BWXT) are both large-cap aerospace companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, earnings, valuation, profitability, risk and dividends.

Dividends

Saab pays an annual dividend of $0.07 per share and has a dividend yield of 0.2%. BWX Technologies pays an annual dividend of $1.00 per share and has a dividend yield of 0.5%. Saab pays out 11.5% of its earnings in the form of a dividend. BWX Technologies pays out 31.3% 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. BWX Technologies has increased its dividend for 2 consecutive years. BWX Technologies is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Saab has a beta of -0.02, meaning that its share price is 102% less volatile than the S&P 500. Comparatively, BWX Technologies has a beta of 0.78, meaning that its share price is 22% less volatile than the S&P 500.

Earnings & Valuation

This table compares Saab and BWX Technologies”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Saab	$6.03 billion	5.40	$394.58 million	$0.61	49.83
BWX Technologies	$2.70 billion	6.32	$281.94 million	$3.20	58.38

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

Insider and Institutional Ownership

94.4% of BWX Technologies shares are owned by institutional investors. 0.5% of BWX Technologies shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Saab and BWX Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Saab	7.45%	13.82%	5.19%
BWX Technologies	10.28%	30.61%	10.77%

Analyst Ratings

This is a summary of current ratings and price targets for Saab and BWX Technologies, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Saab	2	1	0	1	2.00
BWX Technologies	1	3	7	2	2.77

BWX Technologies has a consensus target price of $160.83, indicating a potential downside of 13.92%. Given BWX Technologies’ stronger consensus rating and higher probable upside, analysts plainly believe BWX Technologies is more favorable than Saab.

Summary

BWX Technologies beats Saab on 15 of the 18 factors compared between the two stocks.

About Saab

Saab AB (publ) provides products, services, and solutions for military defense, aviation, and civil security markets worldwide. The company operates through Aeronautics, Dynamics, Surveillance, Kockums, and Combitech segments. The company develops military aviation technology, as well as conducts studies on manned and unmanned aircraft. It also provides ground combat weapons, missile systems, torpedoes, unmanned underwater vehicles, training and simulation systems, and signature management systems for armed forces; and niche products for the civil and defense market, such as underwater vehicles for the offshore industry. In addition, the company offers solutions for safety and security, surveillance and decision support, and threat detection, location, and protection, including airborne, ground-based and naval radar, electronic warfare, and combat systems, as well as C4I solutions. Additionally, it provides submarines with the Stirling system for air independent propulsion, surface combatants, mine hunting systems, and autonomous vessels; and systems development, systems integration, information security, systems security, communications, mechanics, and technical product information and logistics. Saab AB (publ) was incorporated in 1937 and is headquartered in Stockholm, Sweden.

About BWX Technologies

BWX Technologies, Inc., together with its subsidiaries, manufactures and sells nuclear components in the United States, Canada, and internationally. It operates through two segments, Government Operations and Commercial Operations. The Government Operations segment designs and manufactures naval nuclear components, reactors, and nuclear fuel; fabrication activities; and supplies proprietary and sole-source valves, manifolds, and fittings to naval and commercial shipping customers. This segment also involved in manufacture of close-tolerance and equipment for nuclear applications; down blend government stockpiles of uranium; receives, stores, characterizes, dissolves, recovers, and purifies uranium-bearing materials; and supplies research reactor fuel elements for colleges, universities, and national laboratories, as well as components for defense applications. The Commercial Operations segment designs and manufactures commercial nuclear steam generators, heat exchangers, pressure vessels, and reactor components; and other auxiliary equipment, including containers for the storage of nuclear fuel and other high-level nuclear waste. This segment also offers nuclear fuel, fuel handling systems, tooling delivery systems, nuclear grade materials, and precisely machined components, and related services for CANDU nuclear power plants; provides in-plant inspection, maintenance, and modification services, as well as non-destructive examination and tooling/repair solutions; and manufactures medical radioisotopes, radiopharmaceuticals, and medical devices. The company was formerly known as The Babcock & Wilcox Company and changed its name to BWX Technologies, Inc. in June 2015. BWX Technologies, Inc. was founded in 1867 and is headquartered in Lynchburg, Virginia.