Rheinmetall (OTCMKTS:RNMBY) & Elbit Systems (NASDAQ:ESLT) Critical Survey

Rheinmetall (OTCMKTS:RNMBY) and Elbit Systems (NASDAQ:ESLT) are both large-cap aerospace companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, analyst recommendations and dividends.

Profitability

This table compares Rheinmetall and Elbit Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rheinmetall	N/A	N/A	N/A
Elbit Systems	5.91%	15.04%	4.69%

Valuation & Earnings

This table compares Rheinmetall and Elbit Systems”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rheinmetall	$10.55 billion	7.85	$775.87 million	$2.52	143.30
Elbit Systems	$7.72 billion	5.11	$321.14 million	$9.84	90.25

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

Risk & Volatility

Rheinmetall has a beta of 0.12, indicating that its stock price is 88% less volatile than the S&P 500. Comparatively, Elbit Systems has a beta of 0.22, indicating that its stock price is 78% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Rheinmetall and Elbit Systems, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rheinmetall	1	0	5	1	2.86
Elbit Systems	0	3	2	0	2.40

Elbit Systems has a consensus price target of $550.33, suggesting a potential downside of 38.03%. Given Elbit Systems’ higher possible upside, analysts clearly believe Elbit Systems is more favorable than Rheinmetall.

Institutional and Insider Ownership

17.9% of Elbit Systems shares are owned by institutional investors. 0.8% of Elbit Systems shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Rheinmetall pays an annual dividend of $1.26 per share and has a dividend yield of 0.3%. Elbit Systems pays an annual dividend of $2.25 per share and has a dividend yield of 0.3%. Rheinmetall pays out 50.0% of its earnings in the form of a dividend. Elbit Systems pays out 22.9% 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. Elbit Systems has increased its dividend for 1 consecutive years.

Summary

Elbit Systems beats Rheinmetall on 10 of the 18 factors compared between the two stocks.

About Rheinmetall

Rheinmetall AG provides mobility and security technologies worldwide. The company operates in five segments: Vehicle Systems, Weapon and Ammunition, Electronic Solutions, Sensors and Actuators, and Materials and Trade. The Vehicle Systems segment offers combat, logistics, support, and special vehicles, including armored tracked vehicles, CBRN protection systems, artillery, turret systems, and wheeled logistics and tactical vehicles. The Weapon and Ammunition segment provides firepower and protection solutions, such as weapons and munition, protection systems, propellants and international projects and services. The Electronic Solutions segment offers a chain of systems network, such as sensors, networking platforms, automated connected effectors for soldiers, and cyberspace protection solutions, and training and simulation solutions. Its products include air defense systems; soldier systems; command, control, and reconnaissance systems; fire control systems; sensors; and simulations for the army, air force, navy, and civil applications. The Sensors and Actuators segment provides a portfolio of products comprising exhaust gas recirculation systems; throttle valves, control dampers, and exhaust flaps for electromotors; solenoid valves; actuators and valve train systems; oil, water, and vacuum pumps for passenger cars, commercial vehicles, and light and heavy-duty off-road applications; and industrial solutions. The Materials and Trade segment develops system components for the basic motors, such as engine blocks, structural components, and cylinder heads; plain bearings, and bushes; and replacement parts. It also engages in the aftermarket activities. The company was formerly known as Rheinmetall Berlin AG and changed its name to Rheinmetall AG in 1996. Rheinmetall AG was founded in 1889 and is headquartered in Düsseldorf, Germany.

About Elbit Systems

Elbit Systems Ltd. develops and supplies a portfolio of airborne, land, and naval systems and products for the defense, homeland security, and commercial aviation applications primarily in Israel. The company operates through Aerospace, C4I and Cyber, ISTAR and EW, Land, and Elbit Systems of America segments. It also offers military aircraft and helicopter systems; commercial aviation systems and aerostructures; unmanned aircraft systems; electro-optic, night vision, and countermeasures systems; naval systems; land vehicle systems; munitions, such as precision munitions for land, air, and sea applications; command, control, communications, computer, intelligence, surveillance and reconnaissance, and cyber systems; electronic warfare and signal intelligence systems; and other commercial activities. In addition, the company manufactures and sells data links and radio communication systems and equipment, and cyber intelligence, autonomous, and homeland security solutions. Further, it provides various electronic warfare and signal intelligence systems, and laser systems; armored vehicle and other platforms survivability and protection systems, artillery, and mortar systems, as well as provides various training and support services. Additionally, the company offers products and systems solutions to military, homeland security, medical instrumentation, and commercial aviation clients. It markets its systems and products as a prime contractor or subcontractor to various governments and companies. It also has operations in Israel, North America, Europe, Latin America, the Asia-Pacific, and internationally. The company was incorporated in 1966 and is based in Haifa, Israel.