Leidos (NASDAQ: NTCT) and NetScout Systems (NASDAQ:NTCT) are both aerospace companies, but which is the better business? We will compare the two companies based on the strength of their risk, analyst recommendations, institutional ownership, earnings, valuation, dividends and profitability.

Profitability

This table compares Leidos and NetScout Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Leidos 4.42% 18.05% 6.87%
NetScout Systems 4.28% 3.79% 2.47%

Risk & Volatility

Leidos has a beta of 1.67, suggesting that its share price is 67% more volatile than the S&P 500. Comparatively, NetScout Systems has a beta of 1.3, suggesting that its share price is 30% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Leidos and NetScout Systems, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Leidos 0 2 5 0 2.71
NetScout Systems 0 4 2 0 2.33

Leidos presently has a consensus target price of $75.29, indicating a potential upside of 8.08%. NetScout Systems has a consensus target price of $27.60, indicating a potential upside of 11.07%. Given NetScout Systems’ higher probable upside, analysts plainly believe NetScout Systems is more favorable than Leidos.

Dividends

Leidos pays an annual dividend of $1.28 per share and has a dividend yield of 1.8%. NetScout Systems does not pay a dividend. Leidos pays out 34.4% of its earnings in the form of a dividend.

Insider & Institutional Ownership

74.2% of Leidos shares are owned by institutional investors. 1.1% of Leidos shares are owned by insiders. Comparatively, 3.9% of NetScout Systems shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Leidos and NetScout Systems’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Leidos $10.17 billion 1.03 $366.00 million $3.72 18.73
NetScout Systems $986.79 million 2.03 $79.81 million $0.99 25.10

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

Summary

Leidos beats NetScout Systems on 11 of the 16 factors compared between the two stocks.

About Leidos

Leidos Holdings, Inc. provides services and solutions in the defense, intelligence, civil, and health markets primarily in the United States. The company operates through three segments: Defense Solutions, Civil, and Health. The Defense Solutions segment offers national security solutions and systems for air, land, sea, space, and cyberspace for the U.S. intelligence community, Department of Defense, military services, the U.S. Department of Homeland Security, and government agencies of U.S. allies abroad, as well as other federal, civilian, and commercial customers in national security industry. Its solutions include technology, intelligence systems, command and control, data analytics, logistics, and cybersecurity solutions, as well as intelligence analysis and operations support services to critical missions. The Civil segment provides systems integration services to Air Navigation Service providers, including the Federal Aviation Administration, Transportation Security Administration, and airport operators; vehicle and cargo inspection system, which enables the scanning of vehicles and cargo that produces a image using a low radiation dose; IT solutions in cloud computing, mobility, application modernization, DevOps, data center, network modernization, asset management, help desk operations, and digital workplace enablement; federal environment and infrastructure; and logistics services. The Health segment offers solutions to federal and commercial customers responsible for health and well-being of people worldwide, including complex systems integration, managed health services, enterprise IT transformation, and life sciences services. The company was founded in 1969 and is headquartered in Reston, Virginia.

About NetScout Systems

NetScout Systems, Inc. provides real-time operational intelligence and performance analytics for digital business services against disruptions in availability, performance, and security in the United States, Europe, Asia, and internationally. The company offers nGeniusONE management software that enables customers to predict, preempt, and resolve network and service delivery problems, as well as facilitate the optimization and capacity planning of their network infrastructures; and specialized platforms and analytic modules that enable its customers to analyze and troubleshoot traffic in radio access and Wi-Fi networks. It also provides Intelligent Data Sources under the InfiniStream brand name that provide real-time collection and analysis of data from the network; packet flow systems that deliver targeted network traffic access to an increasing number of monitoring and security systems; and a suite of test access points that enable non-disruptive access to network traffic with multiple link type and speed options. In addition, the company offers portable network analysis and troubleshooting tools, which help customers identify key issues that impact network and application performance. Further, it provides security solutions that enable service providers and enterprises to protect their networks against distributed denial of service attacks; and threat detection solutions that enable enterprises to identify and investigate advanced threat campaigns that present tangible risks to the integrity of their networks. The company serves enterprise customers in industries, such as financial services, technology, manufacturing, healthcare, utilities, education, transportation, and retail; mobile operators, wireline operators, cable operators, and cloud providers; and governmental agencies through a direct sales force, and indirect reseller and distribution channels. NetScout Systems, Inc. was founded in 1984 and is headquartered in Westford, Massachusetts.

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