Applied Energetics (OTCMKTS:AERG) and Raytheon (NYSE:RTN) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, dividends, earnings, profitability and institutional ownership.

Earnings and Valuation

This table compares Applied Energetics and Raytheon’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Applied Energetics N/A N/A -$790,000.00 N/A N/A
Raytheon $25.35 billion 1.93 $2.02 billion $7.62 22.61

Raytheon has higher revenue and earnings than Applied Energetics.

Volatility & Risk

Applied Energetics has a beta of 4.43, suggesting that its stock price is 343% more volatile than the S&P 500. Comparatively, Raytheon has a beta of 0.84, suggesting that its stock price is 16% less volatile than the S&P 500.

Dividends

Raytheon pays an annual dividend of $3.47 per share and has a dividend yield of 2.0%. Applied Energetics does not pay a dividend. Raytheon pays out 45.5% of its earnings in the form of a dividend. Raytheon has raised its dividend for 13 consecutive years.

Profitability

This table compares Applied Energetics and Raytheon’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Applied Energetics N/A N/A -540.21%
Raytheon 9.33% 24.43% 8.42%

Analyst Ratings

This is a summary of current ratings and target prices for Applied Energetics and Raytheon, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Applied Energetics 0 0 0 0 N/A
Raytheon 0 3 10 0 2.77

Raytheon has a consensus price target of $231.33, indicating a potential upside of 34.28%. Given Raytheon’s higher probable upside, analysts plainly believe Raytheon is more favorable than Applied Energetics.

Insider and Institutional Ownership

73.5% of Raytheon shares are owned by institutional investors. 7.6% of Applied Energetics shares are owned by insiders. Comparatively, 0.2% of Raytheon shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Raytheon beats Applied Energetics on 10 of the 13 factors compared between the two stocks.

About Applied Energetics

Applied Energetics, Inc. engages in the development of ultra-short pulse lasers, laser guided energy, and direct discharge electrical products for military and commercial applications worldwide. It also offers high voltage electronics, optical systems, and integrated guided energy products. The company was founded in 1990 and is based in Tucson, Arizona.

About Raytheon

Raytheon Company develops integrated products, services, and solutions for defense and other government markets worldwide. It operates through five segments: Integrated Defense Systems (IDS); Intelligence, Information and Services (IIS); Missile Systems (MS); Space and Airborne Systems (SAS); and Forcepoint. The IDS segment provides integrated air and missile defense; land and sea-based radar solutions; command, control, communications, computers, cyber, and intelligence solutions; and naval combat and ship electronic systems. The IIS segment offers a range of technical and professional services, such as intelligence, surveillance and reconnaissance, navigation, DoD space and weather, cybersecurity, analytics, training, logistics, mission support, engineering, and automation and sustainment solutions; and air traffic management systems. The MS segment develops and supports a range of weapon systems, including missiles, smart munitions, close-in weapon systems, projectiles, kinetic kill vehicles, directed energy effectors, and combat sensor solutions. The SAS segment provides electro-optical/infrared sensors, airborne radars for surveillance and fire control applications, lasers, precision guidance systems, signals intelligence systems, processors, electronic warfare systems, and communication and space-qualified systems. The Forcepoint segment develops cyber security products comprising insider threat solutions, data loss prevention, firewall technology, cross domain transfer, and cloud and on premise Web and email security products. The company serves the U.S. Department of Defense, the U.S. Intelligence Community, the U.S. Armed Forces, the Federal Aviation Administration, the National Oceanic and Atmospheric Administration, Department of Homeland Security, the National Aeronautics and Space Administration, and other international customers. Raytheon Company was founded in 1922 and is headquartered in Waltham, Massachusetts.

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