Raytheon Technologies (NYSE:RTX) and Honeywell International (NYSE:HON) are both large-cap aerospace companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, analyst recommendations, institutional ownership, earnings, dividends and risk.
Volatility & Risk
Raytheon Technologies has a beta of 1.27, indicating that its stock price is 27% more volatile than the S&P 500. Comparatively, Honeywell International has a beta of 1.03, indicating that its stock price is 3% more volatile than the S&P 500.
This table compares Raytheon Technologies and Honeywell International’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Raytheon Technologies||$77.05 billion||0.67||$5.54 billion||$8.26||7.22|
|Honeywell International||$36.71 billion||2.72||$6.14 billion||$8.16||17.46|
Honeywell International has lower revenue, but higher earnings than Raytheon Technologies. Raytheon Technologies is trading at a lower price-to-earnings ratio than Honeywell International, indicating that it is currently the more affordable of the two stocks.
Raytheon Technologies pays an annual dividend of $1.90 per share and has a dividend yield of 3.2%. Honeywell International pays an annual dividend of $3.60 per share and has a dividend yield of 2.5%. Raytheon Technologies pays out 23.0% of its earnings in the form of a dividend. Honeywell International pays out 44.1% 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. Honeywell International has raised its dividend for 9 consecutive years. Raytheon Technologies is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares Raytheon Technologies and Honeywell International’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional and Insider Ownership
78.7% of Raytheon Technologies shares are owned by institutional investors. Comparatively, 76.5% of Honeywell International shares are owned by institutional investors. 0.2% of Raytheon Technologies shares are owned by insiders. Comparatively, 0.6% of Honeywell International shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
This is a breakdown of current recommendations for Raytheon Technologies and Honeywell International, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Raytheon Technologies presently has a consensus price target of $95.94, suggesting a potential upside of 60.86%. Honeywell International has a consensus price target of $157.13, suggesting a potential upside of 10.30%. Given Raytheon Technologies’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Raytheon Technologies is more favorable than Honeywell International.
Honeywell International beats Raytheon Technologies on 9 of the 17 factors compared between the two stocks.
Raytheon Technologies Company Profile
Raytheon Technologies Corporation, an aerospace and defense company, provides advanced systems and services for commercial, military, and government customers worldwide. It operates through four segments: Collins Aerospace Systems, Pratt & Whitney, Raytheon Intelligence & Space, and Raytheon Missiles & Defense. The Collins Aerospace Systems segment offers aerostructures, avionics, interiors, mechanical systems, mission systems, and power controls that serve customers in the commercial, regional, business aviation, and military sectors. The Pratt & Whitney segment designs, manufactures, and services aircraft engines and auxiliary power systems for commercial, military, and business aircraft. The Raytheon Intelligence & Space segment engages in developing various sensors, training, and cyber and software solutions. The Raytheon Missiles & Defense segment provides various advanced end-to-end solutions to detect, track, and engage threats. The company was incorporated in 1934 and is headquartered in Waltham, Massachusetts.
Honeywell International Company Profile
Honeywell International Inc. operates as a diversified technology and manufacturing company worldwide. Its Aerospace segment supplies products, software, and services for aircrafts and vehicles. This segment offers auxiliary power units, propulsion engines, integrated avionics, environmental control and electric power systems, engine controls, flight safety, communications, navigation hardware, data and software applications, radar and surveillance systems, aircraft lighting, advanced systems and instruments, satellite and space components, and aircraft wheels and brakes; spare parts; repair, overhaul, and maintenance services; and connected solutions and data services for the aftermarket, as well as provides wireless connectivity and management and technical services. The company's Honeywell Building Technologies segment offers products, software, solutions, and technologies, such as sensors, switches, control systems and instruments for energy management; access control; video surveillance; fire products; remote patient monitoring systems; advanced software applications; and installation, maintenance and upgrades of systems. Its Performance Materials and Technologies segment develops and manufactures process technology products, including catalysts and adsorbents, equipment, and consulting services. The company's Safety and Productivity Solutions segment provides products, software, and connected solutions. Its safety products comprise personal protection equipment, apparel, gear, and footwear; gas detection technology; and cloud-based notification and emergency messaging. This segment's productivity solutions products and services include mobile devices and software; supply chain and warehouse automation equipment, software and solutions; custom-engineered sensors, switches, and controls; and software-based data and asset management productivity solutions. Honeywell International Inc. was incorporated in 1985 and is based in Morris Plains, New Jersey.
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