Raytheon Technologies vs Lockheed Martin

Raytheon Technologies and Lockheed Martin are two of the largest aerospace and defense companies in the world, with each boasting a long history of excellence in their respective fields. Both companies have seen steady growth in their stocks over the years, thanks to their strong financial performance and contracts with government agencies. Investors looking to add defense stocks to their portfolio may find both Raytheon Technologies and Lockheed Martin to be attractive options, but a closer look at their financials, growth prospects, and market conditions is essential to make an informed decision.

Raytheon Technologies or Lockheed Martin?

When comparing Raytheon Technologies and Lockheed Martin, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Raytheon Technologies and Lockheed Martin.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Raytheon Technologies has a dividend yield of 1.95%, while Lockheed Martin has a dividend yield of 2.6%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Raytheon Technologies reports a 5-year dividend growth of -3.93% year and a payout ratio of 141.34%. On the other hand, Lockheed Martin reports a 5-year dividend growth of 8.18% year and a payout ratio of 45.22%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Raytheon Technologies P/E ratio at 73.61 and Lockheed Martin's P/E ratio at 21.46. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Raytheon Technologies P/B ratio is 2.82 while Lockheed Martin's P/B ratio is 23.41.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Raytheon Technologies has seen a 5-year revenue growth of -0.42%, while Lockheed Martin's is 0.43%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Raytheon Technologies's ROE at 3.64% and Lockheed Martin's ROE at 93.12%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $124.69 for Raytheon Technologies and $603.72 for Lockheed Martin. Over the past year, Raytheon Technologies's prices ranged from $72.48 to $126.82, with a yearly change of 74.97%. Lockheed Martin's prices fluctuated between $413.92 and $614.48, with a yearly change of 48.45%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.