Critical Comparison: BWX Technologies (BWXT) vs. L-3 Communications Holdings (LLL)

BWX Technologies (NYSE: BWXT) and L-3 Communications Holdings (NYSE:LLL) are both mid-cap computer and technology companies, but which is the better business? We will compare the two businesses based on the strength of their risk, profitability, earnings, dividends, institutional ownership, analyst recommendations and valuation.

Earnings & Valuation

This table compares BWX Technologies and L-3 Communications Holdings’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
BWX Technologies $1.62 billion 3.35 $322.78 million $1.89 28.90
L-3 Communications Holdings $10.90 billion 1.32 $1.32 billion $8.87 20.66

L-3 Communications Holdings has higher revenue and earnings than BWX Technologies. L-3 Communications Holdings is trading at a lower price-to-earnings ratio than BWX Technologies, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings for BWX Technologies and L-3 Communications Holdings, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BWX Technologies 0 1 4 0 2.80
L-3 Communications Holdings 0 7 5 1 2.54

BWX Technologies currently has a consensus price target of $51.40, suggesting a potential downside of 5.91%. L-3 Communications Holdings has a consensus price target of $182.50, suggesting a potential downside of 0.41%. Given L-3 Communications Holdings’ higher possible upside, analysts plainly believe L-3 Communications Holdings is more favorable than BWX Technologies.

Institutional and Insider Ownership

97.0% of BWX Technologies shares are held by institutional investors. Comparatively, 79.1% of L-3 Communications Holdings shares are held by institutional investors. 0.8% of BWX Technologies shares are held by company insiders. Comparatively, 2.9% of L-3 Communications Holdings shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

BWX Technologies has a beta of 0.46, suggesting that its stock price is 54% less volatile than the S&P 500. Comparatively, L-3 Communications Holdings has a beta of 1.15, suggesting that its stock price is 15% more volatile than the S&P 500.

Profitability

This table compares BWX Technologies and L-3 Communications Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BWX Technologies 11.81% 107.13% 12.81%
L-3 Communications Holdings 6.44% 14.15% 5.60%

Dividends

BWX Technologies pays an annual dividend of $0.44 per share and has a dividend yield of 0.8%. L-3 Communications Holdings pays an annual dividend of $3.00 per share and has a dividend yield of 1.6%. BWX Technologies pays out 23.3% of its earnings in the form of a dividend. L-3 Communications Holdings pays out 33.8% 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. BWX Technologies has raised its dividend for 13 consecutive years.

About BWX Technologies

BWX Technologies, Inc. is a manufacturer of nuclear components and a service provider. The Company’s businesses focus on the design, engineering and manufacture of precision naval nuclear components, reactors and nuclear fuel for the United States Government. Its segments include Nuclear Operations, Technical Services, Nuclear Energy and Other. It provides uranium processing and environmental site restoration services, as well as a range of products and services to customers in the nuclear power industry. Nuclear Operations engineers, designs and manufactures precision naval nuclear components and reactors for the United States Department of Energy/National Nuclear Security Administration’s Naval Nuclear Propulsion Program. Technical Services provides various services to the United States Government. Nuclear Energy designs, licenses, manufactures and delivers commercial nuclear steam generators, pressure vessels, reactor components, heat exchangers and other auxiliary equipment.

About L-3 Communications Holdings

L3 Technologies, Inc., formerly L-3 Communications Holdings, Inc., is a prime contractor in Intelligence, Surveillance and Reconnaissance (ISR) systems, aircraft sustainment, simulation and training, night vision and image intensification equipment and security and detection systems. The Company provides a broad range of communication and electronic systems and products used on military and commercial platforms. It operates through four segments: Electronic Systems, Aerospace Systems, Communication Systems and Sensor Systems. Electronic Systems provides a broad range of products and services for military and commercial customers in several niche markets across several business areas. Aerospace Systems delivers integrated solutions and provides engineering, modernization, upgrade, sustainment, and maintenance and logistics support. Communication Systems delivers products and services for the global communications market. Sensor Systems provides diverse sensor technologies.

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