Analyzing Red Cat (NASDAQ:RCAT) & Northrop Grumman (NYSE:NOC)

Red Cat (NASDAQ:RCAT) and Northrop Grumman (NYSE:NOC) are both industrials companies, but which is the better business? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, risk, earnings, profitability and institutional ownership.

Earnings & Valuation

This table compares Red Cat and Northrop Grumman”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Red Cat	$71.54 million	12.16	-$72.07 million	($0.81)	-8.75
Northrop Grumman	$41.95 billion	1.79	$4.18 billion	$31.48	16.78

Northrop Grumman has higher revenue and earnings than Red Cat. Red Cat is trading at a lower price-to-earnings ratio than Northrop Grumman, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Red Cat has a beta of 1.35, indicating that its stock price is 35% more volatile than the S&P 500. Comparatively, Northrop Grumman has a beta of -0.11, indicating that its stock price is 111% less volatile than the S&P 500.

Profitability

This table compares Red Cat and Northrop Grumman’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Red Cat	-136.26%	-32.25%	-28.48%
Northrop Grumman	10.48%	24.25%	8.15%

Insider and Institutional Ownership

38.0% of Red Cat shares are owned by institutional investors. Comparatively, 83.4% of Northrop Grumman shares are owned by institutional investors. 12.5% of Red Cat shares are owned by insiders. Comparatively, 0.2% of Northrop Grumman shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings for Red Cat and Northrop Grumman, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Red Cat	1	1	5	2	2.89
Northrop Grumman	0	8	11	2	2.71

Red Cat currently has a consensus price target of $16.71, suggesting a potential upside of 135.74%. Northrop Grumman has a consensus price target of $659.86, suggesting a potential upside of 24.95%. Given Red Cat’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Red Cat is more favorable than Northrop Grumman.

Summary

Northrop Grumman beats Red Cat on 9 of the 14 factors compared between the two stocks.

About Red Cat

Red Cat Holdings, Inc. engages in the provision of various products, services, and solutions to the drone industry. The company operates through two segments: Enterprise and Consumer. It built infrastructure to manages drone fleets and fly, and provide services remotely, navigate confined industrial interior spaces and dangerous military environment. Red Cat Holdings, Inc. is based in San Juan, Puerto Rico.

About Northrop Grumman

Northrop Grumman Corporation operates as an aerospace and defense technology company in the United States, Asia/Pacific, Europe, and internationally. The company’s Aeronautics Systems segment designs, develops, manufactures, integrates, and sustains aircraft systems. This segment also offers unmanned autonomous aircraft systems, including high-altitude long-endurance strategic ISR systems and vertical take-off and landing tactical ISR systems; and strategic long-range strike aircraft, tactical fighter and air dominance aircraft, and airborne battle management and command and control systems. Its Defense Systems segment designs, develops, integrates, and produces tactical weapons and missile defense solutions, and provides sustainment, modernization, and training services for manned and unmanned aircraft and electronics systems. It also offers integrated, all-domain command, and control battle management systems, precision strike weapons; high speed air-breathing and hypersonic systems; high-performance gun systems, ammunition, precision munitions and advanced fuzes; aircraft and mission systems logistics support, sustainment, operations and modernization; and warfighter training services. The company’s Mission Systems segment offers command, control, communications and computers, intelligence, surveillance, and reconnaissance systems; radar, electro-optical/infrared and acoustic sensors; electronic warfare systems; advanced communications and network systems; cyber solutions; intelligence processing systems; navigation; and maritime power, propulsion, and payload launch systems. Its Space Systems segment offers satellites, spacecraft systems, subsystems, sensors, and payloads; ground systems; missile defense systems and interceptors; launch vehicles and related propulsion systems; and strategic missiles. Northrop Grumman Corporation was founded in 1939 and is based in Falls Church, Virginia.