Contrasting BWX Technologies (BWXT) and Orbital ATK (OA)

BWX Technologies (NYSE: BWXT) and Orbital ATK (NYSE:OA) are both mid-cap computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, risk, dividends and earnings.

Insider and Institutional Ownership

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94.6% of BWX Technologies shares are owned by institutional investors. Comparatively, 80.6% of Orbital ATK shares are owned by institutional investors. 0.5% of BWX Technologies shares are owned by insiders. Comparatively, 1.2% of Orbital ATK shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares BWX Technologies and Orbital ATK’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BWX Technologies 8.76% 77.24% 12.31%
Orbital ATK 6.50% 18.32% 6.55%

Earnings and Valuation

This table compares BWX Technologies and Orbital ATK’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
BWX Technologies $1.69 billion 3.77 $147.84 million $2.05 31.19
Orbital ATK $4.76 billion 1.61 $310.00 million $6.28 21.16

Orbital ATK has higher revenue and earnings than BWX Technologies. Orbital ATK is trading at a lower price-to-earnings ratio than BWX Technologies, indicating that it is currently the more affordable of the two stocks.

Dividends

BWX Technologies pays an annual dividend of $0.64 per share and has a dividend yield of 1.0%. Orbital ATK pays an annual dividend of $1.28 per share and has a dividend yield of 1.0%. BWX Technologies pays out 31.2% of its earnings in the form of a dividend. Orbital ATK pays out 20.4% 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. BWX Technologies has raised its dividend for 2 consecutive years and Orbital ATK has raised its dividend for 2 consecutive years.

Volatility & Risk

BWX Technologies has a beta of 0.49, indicating that its share price is 51% less volatile than the S&P 500. Comparatively, Orbital ATK has a beta of -0.28, indicating that its share price is 128% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and recommmendations for BWX Technologies and Orbital ATK, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BWX Technologies 1 2 6 0 2.56
Orbital ATK 0 9 1 0 2.10

BWX Technologies presently has a consensus target price of $64.63, indicating a potential upside of 1.09%. Orbital ATK has a consensus target price of $122.58, indicating a potential downside of 7.76%. Given BWX Technologies’ stronger consensus rating and higher possible upside, research analysts plainly believe BWX Technologies is more favorable than Orbital ATK.

Summary

BWX Technologies beats Orbital ATK on 11 of the 16 factors compared between the two stocks.

About BWX Technologies

BWX Technologies, Inc. manufactures and sells nuclear components to the United States government. The company operates in three segments: Nuclear Operations, Technical Services, and Nuclear Energy. The Nuclear Operations segment offers precision naval nuclear components and reactors; close-tolerance and equipment for nuclear applications; and components for defense applications, as well as critical nuclear components, fuels, and assemblies for government and other uses. This segment also converts or downblends high-enriched uranium into low-enriched fuel for use in commercial reactors to generate electricity. The Technical Services segment provides uranium processing, environmental site restoration, and management and operating services to support governments in the operation of complex facilities and environmental remediation activities. The Nuclear Energy segment designs, licenses, manufactures, and delivers commercial nuclear steam generators, pressure vessels, reactor components, heat exchangers, and other auxiliary equipment, including containers for the storage of spent nuclear fuel and other waste. This segment also offers engineering and licensing services for new nuclear plant designs; services for steam generators and balance of plant equipment; and nondestructive examination and tooling/repair solutions for other plant systems and components. The company was formerly known as The Babcock & Wilcox Company and changed its name to BWX Technologies, Inc. in June 2015. BWX Technologies, Inc. was founded in 1867 and is headquartered in Lynchburg, Virginia.

About Orbital ATK

Orbital ATK, Inc. develops and produces aerospace and defense related products to the U.S. Government, allied nations, prime contractors, and other customers in the United States and internationally. It operates through three segments: Flight Systems Group, Defense Systems Group, and Space Systems Group. The Flight Systems Group segment develops launch vehicles that are used as small-and medium-class space launch vehicles to place satellites into Earth orbit and escape trajectories; interceptor and target vehicles for missile defense systems; suborbital launch vehicles that place payloads into various high-altitude trajectories; rocket propulsion systems for human and cargo launch vehicles; strategic missiles; missile defense interceptors and target vehicles; and composite structures for military and commercial aircraft and launch structures markets. The Defense Systems Group segment develops and produces military ammunition; propulsion systems for tactical missiles and missile defense applications; strike weapons; precision weapons and munitions; high-performance gun systems; aircraft survivability systems; fuzes and warheads; propellant and energetic materials; special mission aircraft; airborne missile warning systems; and defense electronics. The Space Systems Group segment offers small-and medium-class satellites that are used to enable global and regional communications and broadcasting; conduct space-related scientific research; and perform activities related to national security. This segment also provides human-rated space systems for Earth-orbit and deep-space exploration, including re-supplying the international space station; and spacecraft components and subsystems, as well as specialized engineering and operations services. Orbital ATK, Inc. is headquartered in Dulles, Virginia.

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