Analyzing QinetiQ Group (OTCMKTS:QNTQY) and Elbit Systems (NASDAQ:ESLT)

QinetiQ Group (OTCMKTS:QNTQY) and Elbit Systems (NASDAQ:ESLT) are both industrials companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, earnings, dividends, profitability, valuation and risk.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for QinetiQ Group and Elbit Systems, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
QinetiQ Group	0	0	0	0	N/A
Elbit Systems	0	0	0	0	N/A

Valuation and Earnings

This table compares QinetiQ Group and Elbit Systems’ revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
QinetiQ Group	N/A	N/A	N/A	($0.26)	-72.85
Elbit Systems	$5.97 billion	1.55	$215.13 million	$4.83	43.20

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

Dividends

QinetiQ Group pays an annual dividend of $0.23 per share and has a dividend yield of 1.2%. Elbit Systems pays an annual dividend of $1.66 per share and has a dividend yield of 0.8%. QinetiQ Group pays out -89.1% of its earnings in the form of a dividend. Elbit Systems pays out 34.4% 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. QinetiQ Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

17.9% of Elbit Systems shares are held by institutional investors. 0.8% of Elbit Systems shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares QinetiQ Group and Elbit Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
QinetiQ Group	N/A	N/A	N/A
Elbit Systems	3.60%	10.30%	3.03%

Summary

Elbit Systems beats QinetiQ Group on 8 of the 10 factors compared between the two stocks.

About QinetiQ Group

QinetiQ Group plc operates as a science and engineering company primarily in the defense, security, and infrastructure markets in the United Kingdom, the United States, Australia, Europe, and internationally. The company operates through EMEA Services and Global Products segments. It offers advanced materials and manufacturing products; artificial intelligence, analytics, and advanced computing technologies; cyber and electromagnetic technologies; human protection and performance systems; novel systems, and weapons and effects; platform and system design and assessment products; power sources, and energy storage and distribution products; robotics and autonomy services; secure communications and navigation systems; and sensing, processing, and data fusion systems. The company also provides testing and evaluation, training and simulation, and cyber and digital resilience services, as well as unmanned air, land, and surface targets. It serves defense, aviation and aerospace, energy and utility, financial services, government, law enforcement, marine, space, and telecommunications sectors. The company was founded in 2001 and is based in Farnborough, the United Kingdom.

About Elbit Systems

Elbit Systems Ltd. develops and supplies a portfolio of airborne, land, and naval systems and products for the defense, homeland security, and commercial aviation applications primarily in Israel. The company operates through Aerospace, C4I and Cyber, ISTAR and EW, Land, and Elbit Systems of America segments. It also offers military aircraft and helicopter systems; commercial aviation systems and aerostructures; unmanned aircraft systems; electro-optic, night vision, and countermeasures systems; naval systems; land vehicle systems; munitions, such as precision munitions for land, air, and sea applications; command, control, communications, computer, intelligence, surveillance and reconnaissance, and cyber systems; electronic warfare and signal intelligence systems; and other commercial activities. In addition, the company manufactures and sells data links and radio communication systems and equipment, and cyber intelligence, autonomous, and homeland security solutions. Further, it provides various electronic warfare and signal intelligence systems, and laser systems; armored vehicle and other platforms survivability and protection systems, artillery, and mortar systems, as well as provides various training and support services. Additionally, the company offers products and systems solutions to military, homeland security, medical instrumentation, and commercial aviation clients. It markets its systems and products as a prime contractor or subcontractor to various governments and companies. It also has operations in Israel, North America, Europe, Latin America, the Asia-Pacific, and internationally. The company was incorporated in 1966 and is based in Haifa, Israel.