GE Aerospace (NYSE:GE) versus General Dynamics (NYSE:GD) Head to Head Comparison

General Dynamics (NYSE:GD) and GE Aerospace (NYSE:GE) are both large-cap aerospace companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, earnings, profitability, valuation and risk.

Volatility and Risk

General Dynamics has a beta of 0.48, indicating that its stock price is 52% less volatile than the S&P 500. Comparatively, GE Aerospace has a beta of 1.44, indicating that its stock price is 44% more volatile than the S&P 500.

Institutional and Insider Ownership

86.1% of General Dynamics shares are owned by institutional investors. Comparatively, 74.8% of GE Aerospace shares are owned by institutional investors. 1.5% of General Dynamics shares are owned by insiders. Comparatively, 0.2% of GE Aerospace shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Dividends

General Dynamics pays an annual dividend of $6.00 per share and has a dividend yield of 1.9%. GE Aerospace pays an annual dividend of $1.44 per share and has a dividend yield of 0.5%. General Dynamics pays out 40.3% of its earnings in the form of a dividend. GE Aerospace pays out 20.1% 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. General Dynamics has raised its dividend for 34 consecutive years and GE Aerospace has raised its dividend for 2 consecutive years. General Dynamics is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares General Dynamics and GE Aerospace’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
General Dynamics	8.13%	17.99%	7.21%
GE Aerospace	18.64%	31.32%	4.86%

Analyst Ratings

This is a breakdown of current ratings and price targets for General Dynamics and GE Aerospace, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
General Dynamics	1	12	9	0	2.36
GE Aerospace	0	1	10	0	2.91

General Dynamics presently has a consensus target price of $315.7778, indicating a potential downside of 0.56%. GE Aerospace has a consensus target price of $232.9167, indicating a potential downside of 13.44%. Given General Dynamics’ higher probable upside, equities analysts clearly believe General Dynamics is more favorable than GE Aerospace.

Valuation and Earnings

This table compares General Dynamics and GE Aerospace”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
General Dynamics	$47.72 billion	1.79	$3.78 billion	$14.90	21.31
GE Aerospace	$38.70 billion	7.37	$6.56 billion	$7.17	37.53

GE Aerospace has lower revenue, but higher earnings than General Dynamics. General Dynamics is trading at a lower price-to-earnings ratio than GE Aerospace, indicating that it is currently the more affordable of the two stocks.

Summary

GE Aerospace beats General Dynamics on 9 of the 17 factors compared between the two stocks.

About General Dynamics

General Dynamics Corporation operates as an aerospace and defense company worldwide. It operates through four segments: Aerospace, Marine Systems, Combat Systems, and Technologies. The Aerospace segment produces and sells business jets; and offers aircraft maintenance and repair, management, aircraft-on-ground support and completion, charter, staffing, and fixed-base operator services. The Marine Systems segment designs and builds nuclear-powered submarines, surface combatants, and auxiliary ships for the United States Navy and Jones Act ships for commercial customers, as well as builds crude oil and product tankers, and container and cargo ships; provides maintenance, modernization, and lifecycle support services for navy ships; offers and program management, planning, engineering, and design support services for submarine construction programs. The Combat Systems segment manufactures land combat solutions, such as wheeled and tracked combat vehicles, Stryker wheeled combat vehicles, piranha vehicles, weapons systems, munitions, mobile bridge systems with payloads, tactical vehicles, main battle tanks, armored vehicles, and armaments; and offers modernization programs, engineering, support, and sustainment services. The Technologies segment provides information technology solutions and mission support services; mobile communication, computers, and command-and-control mission systems; intelligence, surveillance, and reconnaissance solutions to military, intelligence, and federal civilian customers; cloud computing, artificial intelligence; machine learning; big data analytics; development, security, and operations; and unmanned undersea vehicle manufacturing and assembly services. The company was founded in 1899 and is headquartered in Reston, Virginia.

About GE Aerospace

GE Aerospace (also known as General Electric) is a company that specializes in providing aerospace products and services. It operates through two reportable segments: Commercial Engines and Services and Defense and Propulsion Technologies. It offers jet and turboprop engines, as well as integrated systems for commercial, military, business, and general aviation aircraft. GE demerged into GE Vernova, GE Aerospace, and GE Healthcare.