American Science & Engineering (NASDAQ: ASEI) and Lockheed Martin (NYSE:LMT) are both industrials companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.

Volatility and Risk

American Science & Engineering has a beta of 1.55, meaning that its stock price is 55% more volatile than the S&P 500. Comparatively, Lockheed Martin has a beta of 0.59, meaning that its stock price is 41% less volatile than the S&P 500.

Valuation & Earnings

This table compares American Science & Engineering and Lockheed Martin’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
American Science & Engineering N/A N/A N/A ($0.37) -100.13
Lockheed Martin $49.05 billion 1.81 $6.23 billion $17.12 18.02

Lockheed Martin has higher revenue and earnings than American Science & Engineering. American Science & Engineering is trading at a lower price-to-earnings ratio than Lockheed Martin, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares American Science & Engineering and Lockheed Martin’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Science & Engineering 0.19% 0.15% 0.13%
Lockheed Martin 7.43% 274.99% 7.75%

Analyst Ratings

This is a breakdown of current ratings for American Science & Engineering and Lockheed Martin, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Science & Engineering 0 0 0 0 N/A
Lockheed Martin 0 6 7 0 2.54

Lockheed Martin has a consensus price target of $301.58, suggesting a potential downside of 2.25%. Given Lockheed Martin’s higher probable upside, analysts clearly believe Lockheed Martin is more favorable than American Science & Engineering.

Dividends

American Science & Engineering pays an annual dividend of $2.00 per share and has a dividend yield of 5.4%. Lockheed Martin pays an annual dividend of $7.28 per share and has a dividend yield of 2.4%. American Science & Engineering pays out -540.5% of its earnings in the form of a dividend. Lockheed Martin pays out 42.5% 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. American Science & Engineering has increased its dividend for 14 consecutive years. American Science & Engineering is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

72.9% of American Science & Engineering shares are owned by institutional investors. Comparatively, 78.9% of Lockheed Martin shares are owned by institutional investors. 2.4% of American Science & Engineering shares are owned by company insiders. Comparatively, 0.4% of Lockheed Martin shares are owned 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.

Summary

Lockheed Martin beats American Science & Engineering on 8 of the 13 factors compared between the two stocks.

American Science & Engineering Company Profile

American Science and Engineering, Inc. (AS&E) is engaged in developing, manufacturing, marketing and selling X-ray inspection and other detection products. The Company manufactures X-ray inspection products that can be used to inspect parcels, baggage, vehicles, pallets, cargo containers and people. The Company offers its products for homeland security, force protection, public safety and other critical defense and security applications. The Company’s products and services are grouped into approximately five areas: cargo inspection systems, which include OmniView Gantry System, Z Portal System, Sentry Portal System, CarView System and ASE Connect; mobile cargo inspection systems, which include Z Backscatter Van; parcel and personnel screening inspection systems, which include Gemini System, SmartCheck System and MINI Z System; custom products, and service and support.

Lockheed Martin Company Profile

Lockheed Martin Corporation is a security and aerospace company. The Company operates through four segments. Aeronautics segment is engaged in the research, design, development, manufacture, integration, sustainment, support and upgrade of military aircraft, including combat and air mobility aircraft, unmanned air vehicles and related technologies. Missiles and Fire Control segment provides air and missile defense systems; fire control systems; manned and unmanned ground vehicles, and energy management solutions. Rotary and Mission Systems segment provides design, manufacture, service and support for a range of military and civil helicopters; mission systems and sensors for rotary and fixed-wing aircraft; simulation and training services, and unmanned systems and technologies, among others. Space Systems segment is engaged in the research and development, design, engineering and production of satellites, strategic and defensive missile systems and space transportation systems.

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