Contrasting Elbit Systems (NASDAQ:ESLT) and Optex Systems (NASDAQ:OPXS)

Elbit Systems (NASDAQ:ESLT) and Optex Systems (NASDAQ:OPXS) are both aerospace companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, dividends and valuation.

Insider and Institutional Ownership

17.9% of Elbit Systems shares are owned by institutional investors. Comparatively, 19.1% of Optex Systems shares are owned by institutional investors. 0.8% of Elbit Systems shares are owned by company insiders. Comparatively, 30.3% of Optex Systems shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Elbit Systems has a beta of 0.24, meaning that its share price is 76% less volatile than the S&P 500. Comparatively, Optex Systems has a beta of 0.6, meaning that its share price is 40% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Elbit Systems	5.91%	15.04%	4.69%
Optex Systems	12.45%	26.08%	20.76%

Earnings & Valuation

This table compares Elbit Systems and Optex Systems”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Elbit Systems	$7.72 billion	3.36	$321.14 million	$9.84	59.23
Optex Systems	$41.34 million	2.41	$5.15 million	$0.75	19.14

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

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Elbit Systems and Optex Systems, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Elbit Systems	0	3	2	0	2.40
Optex Systems	0	0	1	0	3.00

Elbit Systems currently has a consensus price target of $550.33, suggesting a potential downside of 5.57%. Given Elbit Systems’ higher probable upside, equities analysts clearly believe Elbit Systems is more favorable than Optex Systems.

Dividends

Elbit Systems pays an annual dividend of $2.25 per share and has a dividend yield of 0.4%. Optex Systems pays an annual dividend of $0.08 per share and has a dividend yield of 0.6%. Elbit Systems pays out 22.9% of its earnings in the form of a dividend. Optex Systems pays out 10.7% 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 raised its dividend for 1 consecutive years. Optex Systems is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Optex Systems beats Elbit Systems on 9 of the 17 factors compared between the two stocks.

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.

About Optex Systems

Optex Systems Holdings, Inc manufactures and sells optical sighting systems and assemblies primarily for the U.S. department of defense, foreign military applications, and commercial markets in the United States. It offers periscopes, such as laser and non-laser protected plastic and glass periscopes, electronic M17 day/thermal periscopes, and vision blocks; sighting systems, including back up sights, digital day and night sighting systems, M36 thermal periscope, unity mirrors, optical weapon system support and maintenance, commander weapon station sights, and sight assembly refurbishments; howitzers comprising M137 telescope, M187 mount, M119 aiming device, XM10 and aiming circles; and applied optics center consisting of laser interference filter, optical assemblies, laser filter units, day windows, and specialty thin film coatings, as well as other products, such as muzzle reference systems, binoculars, collimators, optical lenses and elements, and windows. The company also provides various periscope configurations, rifle and surveillance sights, and night vision optical assemblies. Its products are installed on various types of U.S. military land vehicles, such as the Abrams, Bradley, and Stryker families of fighting vehicles, as well as light armored and armored security vehicles. The company offers its products directly to the federal government, prime contractors, and foreign governments. Optex Systems Holdings, Inc was founded in 1987 and is headquartered in Richardson, Texas. Optex Systems Holdings, Inc is a subsidiary of Sileas Corporation.