Reviewing United Technologies Corporation (UTX) and Esterline Technologies Corporation (NYSE:ESL)

Esterline Technologies Corporation (NYSE: ESL) and United Technologies Corporation (NYSE:UTX) are both mid-cap aerospace companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, risk, dividends, analyst recommendations, institutional ownership and earnings.

Profitability

This table compares Esterline Technologies Corporation and United Technologies Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Esterline Technologies Corporation 6.65% 9.18% 5.06%
United Technologies Corporation 9.15% 18.07% 5.91%

Analyst Recommendations

This is a breakdown of current ratings and target prices for Esterline Technologies Corporation and United Technologies Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Esterline Technologies Corporation 1 3 1 0 2.00
United Technologies Corporation 0 10 5 0 2.33

Esterline Technologies Corporation presently has a consensus target price of $92.60, suggesting a potential upside of 12.79%. United Technologies Corporation has a consensus target price of $122.93, suggesting a potential upside of 6.46%. Given Esterline Technologies Corporation’s higher probable upside, equities research analysts plainly believe Esterline Technologies Corporation is more favorable than United Technologies Corporation.

Dividends

United Technologies Corporation pays an annual dividend of $2.80 per share and has a dividend yield of 2.4%. Esterline Technologies Corporation does not pay a dividend. United Technologies Corporation pays out 42.7% of its earnings in the form of a dividend. United Technologies Corporation has raised its dividend for 5 consecutive years.

Insider and Institutional Ownership

90.9% of Esterline Technologies Corporation shares are held by institutional investors. Comparatively, 78.7% of United Technologies Corporation shares are held by institutional investors. 1.4% of Esterline Technologies Corporation shares are held by insiders. Comparatively, 0.2% of United Technologies Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Risk and Volatility

Esterline Technologies Corporation has a beta of 1.43, indicating that its share price is 43% more volatile than the S&P 500. Comparatively, United Technologies Corporation has a beta of 1.06, indicating that its share price is 6% more volatile than the S&P 500.

Valuation and Earnings

This table compares Esterline Technologies Corporation and United Technologies Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Esterline Technologies Corporation $2.01 billion 1.22 $312.43 million $4.48 18.33
United Technologies Corporation $58.11 billion 1.59 $10.15 billion $6.56 17.60

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

Summary

United Technologies Corporation beats Esterline Technologies Corporation on 11 of the 17 factors compared between the two stocks.

Esterline Technologies Corporation Company Profile

Esterline Technologies Corporation is a specialized manufacturing company. The Company designs, manufactures and markets engineered products and systems for application within the industries it serves. The Company operates through three segments: Avionics & Controls, Sensors & Systems, and Advanced Materials. The Company serves aerospace and defense customers. The Company’s Avionics & Controls business segment includes avionics systems, control and communication systems, and interface technologies capabilities. The Company’s Sensors & Systems business segment includes power systems, connection technologies and advanced sensors capabilities. The Company’s Advanced Materials business segment includes engineered materials and defense technologies capabilities. The Company designs and manufactures ruggedized military personal communication equipment, primarily headsets, handsets and field communications.

United Technologies Corporation Company Profile

United Technologies Corporation is engaged in providing high technology products and services to the building systems and aerospace industries around the world. The Company operates through four segments: Otis; UTC Climate, Controls & Security; Pratt & Whitney, and UTC Aerospace Systems. Otis operates as an elevator and escalator manufacturing, installation and service company. UTC Climate, Controls & Security segment is engaged in providing heating, ventilating, air conditioning (HVAC) and refrigeration solutions. The Pratt & Whitney segment supplies aircraft engines for the commercial, military, business jet and general aviation markets. Pratt & Whitney segment provides fleet management services and aftermarket maintenance, repair and overhaul services. The UTC Aerospace Systems segment provides aerospace products and aftermarket service solutions for aircraft manufacturers, airlines, regional, business and general aviation markets, military, space and undersea operations.

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