Comparing Star Equity (NASDAQ:STRR) & Leidos (NYSE:LDOS)

Leidos (NYSE:LDOS) and Star Equity (NASDAQ:STRR) are both industrials companies, but which is the better business? We will compare the two companies based on the strength of their valuation, dividends, profitability, institutional ownership, risk, analyst recommendations and earnings.

Profitability

This table compares Leidos and Star Equity’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Leidos	7.80%	30.81%	10.78%
Star Equity	-4.35%	-4.21%	-2.39%

Earnings and Valuation

This table compares Leidos and Star Equity”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Leidos	$17.17 billion	0.95	$1.45 billion	$10.72	12.08
Star Equity	$172.16 million	0.22	-$5.92 million	($3.06)	-3.42

Leidos has higher revenue and earnings than Star Equity. Star Equity is trading at a lower price-to-earnings ratio than Leidos, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Leidos has a beta of 0.56, meaning that its share price is 44% less volatile than the S&P 500. Comparatively, Star Equity has a beta of 0.51, meaning that its share price is 49% less volatile than the S&P 500.

Insider & Institutional Ownership

76.1% of Leidos shares are owned by institutional investors. Comparatively, 3.8% of Star Equity shares are owned by institutional investors. 0.8% of Leidos shares are owned by company insiders. Comparatively, 31.6% of Star Equity shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings for Leidos and Star Equity, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Leidos	0	10	6	1	2.47
Star Equity	1	1	1	1	2.50

Leidos presently has a consensus target price of $162.93, suggesting a potential upside of 25.77%. Star Equity has a consensus target price of $28.00, suggesting a potential upside of 167.94%. Given Star Equity’s stronger consensus rating and higher probable upside, analysts clearly believe Star Equity is more favorable than Leidos.

Summary

Leidos beats Star Equity on 11 of the 14 factors compared between the two stocks.

About Leidos

Leidos Holdings, Inc., together with its subsidiaries, provides services and solutions in the defense, intelligence, civil, and health markets in the United States and internationally. The company operates through Defense Solutions, Civil, and Health segments. The Defense Solutions segment offers national security solutions and systems for air, land, sea, space, and cyberspace for the U.S. Intelligence Community, the Department of Defense, the space development agency, the National Aeronautics and Space Administration, defense information systems agency, military services, and government agencies of U.S. allies abroad, as well as other federal and commercial customers in the national security industry. The solutions include technology, large-scale systems, command and control platforms, data analytics, logistics, and cybersecurity solutions, as well as intelligence analysis and operations support services to critical missions. The Civil segment provides systems integration services to air navigation service providers, including the federal aviation administration, the En route automation modernization, advanced technology oceanic procedure, time based flow management, terminal flight data management, geo-7, and future flight services, as well as enterprise-information display systems; and security detection services. It also offers information technology (IT) solutions in cloud computing, mobility, application modernization, DevOps, data center, network modernization, asset management, help desk operations, and digital workplace enablement; and environment, energy, and infrastructure services. The Health segment offers solutions to federal and commercial customers responsible for health and well-being of people, include health information management, managed health, digital modernization, and life sciences research and development services. Leidos Holdings, Inc. was founded in 1969 and is headquartered in Reston, Virginia.

About Star Equity

Star Equity Holdings, Inc. engages in the construction business in the United States and internationally. It operates through two segments: Construction, and Investments. It manufactures modular housing units, structural wall panels, permanent wood foundation systems, and other engineered wood products; supplies general contractors with building materials; holds real estate assets; and manages investments. The company was formerly known as Digirad Corporation and changed its name to Star Equity Holdings, Inc. in December 2020. Star Equity Holdings, Inc. was founded in 1985 and is headquartered in Old Greenwich, Connecticut.