Analyzing L3Harris (NYSE:LHX) & Garmin (NYSE:GRMN)

Garmin (NASDAQ:GRMN) and L3Harris (NYSE:LHX) are both large-cap computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, risk, earnings, valuation, institutional ownership and dividends.

Valuation and Earnings

This table compares Garmin and L3Harris’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Garmin $3.35 billion 4.68 $694.08 million $3.69 21.42
L3Harris $6.80 billion 3.68 $949.00 million $8.29 25.53

L3Harris has higher revenue and earnings than Garmin. Garmin is trading at a lower price-to-earnings ratio than L3Harris, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations and price targets for Garmin and L3Harris, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Garmin 2 3 1 0 1.83
L3Harris 0 1 8 0 2.89

Garmin currently has a consensus price target of $75.79, indicating a potential downside of 4.11%. L3Harris has a consensus price target of $235.41, indicating a potential upside of 11.25%. Given L3Harris’ stronger consensus rating and higher possible upside, analysts clearly believe L3Harris is more favorable than Garmin.

Dividends

Garmin pays an annual dividend of $2.28 per share and has a dividend yield of 2.9%. L3Harris pays an annual dividend of $2.74 per share and has a dividend yield of 1.3%. Garmin pays out 61.8% of its earnings in the form of a dividend. L3Harris pays out 33.1% 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.

Volatility & Risk

Garmin has a beta of 0.91, indicating that its stock price is 9% less volatile than the S&P 500. Comparatively, L3Harris has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500.

Profitability

This table compares Garmin and L3Harris’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Garmin 21.32% 17.97% 14.00%
L3Harris 13.95% 29.27% 10.17%

Institutional & Insider Ownership

42.4% of Garmin shares are held by institutional investors. Comparatively, 95.8% of L3Harris shares are held by institutional investors. 23.8% of Garmin shares are held by company insiders. Comparatively, 2.5% of L3Harris shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

L3Harris beats Garmin on 11 of the 16 factors compared between the two stocks.

Garmin Company Profile

Garmin Ltd. designs, develops, manufactures, markets, and distributes a range of navigation, communication, and information devices worldwide. It operates through five segments: Auto, Aviation, Marine, Outdoor, and Fitness. The Auto segment offers personal navigation devices; infotainment systems; and action cameras, as well as mobile applications under the Garmin and NAVIGON names. The Aviation segment provides navigation, communication, flight control, hazard avoidance, weather radar, radar altimeter, datalink weather, in-cockpit and cloud connectivity, voice controls, and other products and services; wearables, portables, apps, training, simulation, and aviation data services; and traffic collision avoidance, engine information, and terrain awareness and warning systems. This segment also offers controller-pilot data link, a suite of automatic dependent surveillance broadcast solutions. The Marine segment provides chartplotters and multi-function displays, Cartography Products, fish finders, sounders, autopilot systems, radars, compliant instrument displays, VHF communication radios, handhelds and wearable devices, sailing products, and entertainment products. The Outdoor segment offers outdoor handhelds, wearable devices, golf devices, and dog tracking and training/pet obedience devices. The Fitness segment provides running/multi-sport watches, cycling computers, cycling power meters, cycling safety and awareness products, and Connect IQ and activity tracking devices, as well as Garmin Connect and Garmin Connect Mobile, which are Web and mobile platforms for users to track and analyze their fitness and wellness data. The company sells its global positioning system receivers and accessories to retail outlets; and aviation products to aviation dealers and aircraft manufacturers through a network of independent dealers and distributors. Garmin Ltd. was founded in 1990 and is based in Schaffhausen, Switzerland.

L3Harris Company Profile

L3Harris Technologies, Inc. provides technology-based solutions that solve government and commercial customers' mission-critical challenges in the United States and internationally. The company operates in three segments: Communication Systems, Electronic Systems, and Space and Intelligence Systems. It designs, develops, and manufactures radio communications products and systems, including single channel ground and airborne radio systems, multiband manpack and handheld radios, multi-channel manpack and airborne radios, and single-channel airborne radios, as well as wideband rifleman team, ground, and high frequency manpack radios. The company also offers vision-enhancing products; wireless communications systems; and Internet protocol based voice and data communications systems, as well as single-band land mobile radio terminals and multiband radios comprising a handheld radio and a full-spectrum mobile radio for vehicles. In addition, it provides electronic warfare, avionics, command, control, communications, computers, intelligence, surveillance, and reconnaissance solutions for defense and classified customers; and mission-critical communication systems for civil and military aviation and other customers. Further, the company offers intelligence, space protection, geospatial, earth observation, exploration, positioning, navigation and timing, and environmental solutions using advanced sensors, antennas, and payloads, as well as ground processing and information analytics for national security, defense, civil and commercial customers. The company was formerly known as Harris Corporation and changed its name to L3Harris Technologies, Inc. in June 2019. L3Harris Technologies, Inc. was founded in 1895 and is headquartered in Melbourne, Florida.

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