Head-To-Head Comparison: Leonardo DRS (NASDAQ:DRS) and Archer Aviation (NYSE:ACHR)

Leonardo DRS (NASDAQ:DRS) and Archer Aviation (NYSE:ACHR) are both mid-cap industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, risk, profitability, earnings and analyst recommendations.

Institutional and Insider Ownership

18.8% of Leonardo DRS shares are owned by institutional investors. Comparatively, 59.3% of Archer Aviation shares are owned by institutional investors. 0.3% of Leonardo DRS shares are owned by company insiders. Comparatively, 5.6% of Archer Aviation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Leonardo DRS and Archer Aviation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Leonardo DRS	8.52%	12.97%	8.29%
Archer Aviation	N/A	-40.74%	-35.93%

Valuation & Earnings

This table compares Leonardo DRS and Archer Aviation”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Leonardo DRS	$3.65 billion	2.72	$278.00 million	$1.19	31.25
Archer Aviation	$300,000.00	13,539.52	-$618.20 million	($1.08)	-4.88

Leonardo DRS has higher revenue and earnings than Archer Aviation. Archer Aviation is trading at a lower price-to-earnings ratio than Leonardo DRS, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Leonardo DRS has a beta of 0.35, meaning that its share price is 65% less volatile than the S&P 500. Comparatively, Archer Aviation has a beta of 3.23, meaning that its share price is 223% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for Leonardo DRS and Archer Aviation, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Leonardo DRS	0	2	3	2	3.00
Archer Aviation	1	3	5	0	2.44

Leonardo DRS currently has a consensus target price of $53.17, indicating a potential upside of 42.96%. Archer Aviation has a consensus target price of $11.50, indicating a potential upside of 118.01%. Given Archer Aviation’s higher probable upside, analysts plainly believe Archer Aviation is more favorable than Leonardo DRS.

Summary

Leonardo DRS beats Archer Aviation on 9 of the 15 factors compared between the two stocks.

About Leonardo DRS

Leonardo DRS, Inc., together with its subsidiaries, provides defense electronic products and systems, and military support services. It operates through Advanced Sensing and Computing (ASC) segment, and Integrated Mission Systems (IMS) segments. The ASC segment designs, develops, and manufacture sensing and network computing technology that enables real-time situational awareness required for enhanced operational decision making and execution; and offers sensing capabilities span applications, such as missions requiring advanced detection, precision targeting and surveillance sensing, long range electro-optic/infrared, signals intelligence, and other intelligence systems including electronic warfare, ground vehicle sensing, active electronically scanned array tactical radars, dismounted soldier, and space sensing. This segment also provides network computing, which are utilized across a range of mission applications including platform computing on ground and shipboard for advanced battle management, combat systems, radar, command and control, tactical networks, tactical computing, and communications. The IMS segment designs, develops, manufacture, and integrates power conversion, control, and distribution systems, ship propulsion systems, motors and variable frequency drives, force protection systems, transportation, and logistics systems for the U.S. and allied defense customers. This segment also offers electrical propulsion systems, which includes power conversion, control, distribution, and propulsion systems, as well as power dense permanent magnet motors, energy storage systems and associated efficient, rugged, and compact power conversion, electrical actuation systems, as well as cooling technologies; and motor controllers, instrumentation and control equipment, electrical actuation systems, and thermal management systems. The company was incorporated in 1968 and is based in Arlington, Virginia. Leonardo DRS, Inc. operates as a subsidiary of Leonardo S.p.A.

About Archer Aviation

Archer Aviation Inc., together with its subsidiaries, engages in designs, develops, and operates electric vertical takeoff and landing aircraft for use in urban air mobility. The company was formerly known as Atlas Crest Investment Corp. and changed its name to Archer Aviation Inc. The company is headquartered in San Jose, California.