Financial Survey: General Dynamics (NYSE:GD) vs. Innovative Solutions and Support (NASDAQ:ISSC)

Innovative Solutions and Support (NASDAQ:ISSC) and General Dynamics (NYSE:GD) are both industrials companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, earnings, analyst recommendations, dividends, valuation, institutional ownership and profitability.

Volatility & Risk

Innovative Solutions and Support has a beta of 0.59, indicating that its stock price is 41% less volatile than the S&P 500. Comparatively, General Dynamics has a beta of 0.33, indicating that its stock price is 67% less volatile than the S&P 500.

Profitability

This table compares Innovative Solutions and Support and General Dynamics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Innovative Solutions and Support	20.50%	30.53%	17.28%
General Dynamics	8.18%	17.43%	7.67%

Dividends

Innovative Solutions and Support pays an annual dividend of $2.00 per share and has a dividend yield of 10.3%. General Dynamics pays an annual dividend of $6.36 per share and has a dividend yield of 1.9%. Innovative Solutions and Support pays out 190.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. General Dynamics pays out 38.8% of its earnings in the form of a dividend. General Dynamics has raised its dividend for 34 consecutive years.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Innovative Solutions and Support and General Dynamics, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Innovative Solutions and Support	0	2	1	2	3.00
General Dynamics	1	5	12	1	2.68

Innovative Solutions and Support presently has a consensus price target of $16.25, suggesting a potential downside of 16.02%. General Dynamics has a consensus price target of $402.32, suggesting a potential upside of 17.32%. Given General Dynamics’ higher probable upside, analysts clearly believe General Dynamics is more favorable than Innovative Solutions and Support.

Earnings and Valuation

This table compares Innovative Solutions and Support and General Dynamics”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Innovative Solutions and Support	$93.15 million	3.72	$15.63 million	$1.05	18.43
General Dynamics	$52.55 billion	1.77	$4.21 billion	$16.39	20.92

General Dynamics has higher revenue and earnings than Innovative Solutions and Support. Innovative Solutions and Support is trading at a lower price-to-earnings ratio than General Dynamics, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

28.5% of Innovative Solutions and Support shares are owned by institutional investors. Comparatively, 86.1% of General Dynamics shares are owned by institutional investors. 5.9% of Innovative Solutions and Support shares are owned by company insiders. Comparatively, 1.4% of General Dynamics shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

About Innovative Solutions and Support

Innovative Solutions and Support, Inc., a systems integrator, designs, develops, manufactures, sells, and services flight guidance, autothrottles, and cockpit display systems in the United States and internationally. It offers flat panel display systems that replicate the display of analog or digital displays on one screen and replace existing displays in legacy aircraft, as well as used for security monitoring on-board aircraft and as tactical workstations on military aircraft; and flight deck management system, a navigation and performance computer that upgrade for commercial air transport aircraft. The company also provides integrated standby units, which incorporate the measurement and display of attitude, altitude, airspeed, and navigation data into a single backup navigation instrument for military, commercial air transport, and corporate/general aviation applications. In addition, it offers digital air data computers that calculate various air data parameters, such as altitude, airspeed, vertical speed, angle of attack, and other information; integrated air data computers and display units, which calculate and convey air data information; altitude displays that convey aircraft altitude measurements; airspeed displays that convey various airspeed measurements; and altitude alerters. Further, the company offers the engine and fuel displays that convey information related to fuel and oil levels, and engine activity, including oil and hydraulic pressure and temperature; integrated global navigation systems; ThrustSense, a full regime autothrottle; and utility management systems. It serves commercial air transport carriers and corporate/general aviation companies, the Department of Defense and its commercial contractors, aircraft operators, aircraft modification centers, government agencies, and foreign militaries, as well as original equipment manufacturers. Innovative Solutions and Support, Inc. was incorporated in 1988 and is based in Exton, Pennsylvania.

About General Dynamics

General Dynamics Corporation operates as an aerospace and defense company worldwide. It operates through four segments: Aerospace, Marine Systems, Combat Systems, and Technologies. The Aerospace segment produces and sells business jets; and offers aircraft maintenance and repair, management, aircraft-on-ground support and completion, charter, staffing, and fixed-base operator services. The Marine Systems segment designs and builds nuclear-powered submarines, surface combatants, and auxiliary ships for the United States Navy and Jones Act ships for commercial customers, as well as builds crude oil and product tankers, and container and cargo ships; provides maintenance, modernization, and lifecycle support services for navy ships; offers and program management, planning, engineering, and design support services for submarine construction programs. The Combat Systems segment manufactures land combat solutions, such as wheeled and tracked combat vehicles, Stryker wheeled combat vehicles, piranha vehicles, weapons systems, munitions, mobile bridge systems with payloads, tactical vehicles, main battle tanks, armored vehicles, and armaments; and offers modernization programs, engineering, support, and sustainment services. The Technologies segment provides information technology solutions and mission support services; mobile communication, computers, and command-and-control mission systems; intelligence, surveillance, and reconnaissance solutions to military, intelligence, and federal civilian customers; cloud computing, artificial intelligence; machine learning; big data analytics; development, security, and operations; and unmanned undersea vehicle manufacturing and assembly services. The company was founded in 1899 and is headquartered in Reston, Virginia.