Head to Head Analysis: FLIR Systems (FLIR) vs. Harris (HRS)

FLIR Systems (NASDAQ: FLIR) and Harris (NYSE:HRS) are both aerospace companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, risk, valuation, analyst recommendations, profitability and earnings.

Dividends

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FLIR Systems pays an annual dividend of $0.64 per share and has a dividend yield of 1.2%. Harris pays an annual dividend of $2.28 per share and has a dividend yield of 1.3%. FLIR Systems pays out 34.0% of its earnings in the form of a dividend. Harris pays out 41.2% 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. Harris has increased its dividend for 16 consecutive years. Harris is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.



Earnings & Valuation

This table compares FLIR Systems and Harris’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
FLIR Systems $1.80 billion 4.02 $107.22 million $1.88 27.68
Harris $5.90 billion 3.40 $553.00 million $5.53 30.56

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

Institutional & Insider Ownership

93.1% of FLIR Systems shares are owned by institutional investors. Comparatively, 85.0% of Harris shares are owned by institutional investors. 2.0% of FLIR Systems shares are owned by company insiders. Comparatively, 1.9% of Harris shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility and Risk

FLIR Systems has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500. Comparatively, Harris has a beta of 1.26, meaning that its share price is 26% more volatile than the S&P 500.

Profitability

This table compares FLIR Systems and Harris’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
FLIR Systems 5.96% 14.54% 9.63%
Harris 8.63% 24.49% 7.04%

Analyst Recommendations

This is a summary of recent recommendations for FLIR Systems and Harris, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
FLIR Systems 0 2 3 2 3.00
Harris 0 1 7 0 2.88

FLIR Systems currently has a consensus price target of $51.17, indicating a potential downside of 1.68%. Harris has a consensus price target of $169.88, indicating a potential upside of 0.52%. Given Harris’ higher possible upside, analysts clearly believe Harris is more favorable than FLIR Systems.

Summary

Harris beats FLIR Systems on 11 of the 18 factors compared between the two stocks.

About FLIR Systems

FLIR Systems, Inc. designs, develops, manufactures, and markets thermal imaging systems, visible-light imaging systems, locater systems, measurement and diagnostic systems, and threat-detection solutions worldwide. The company operates in six segments: Surveillance, Instruments, Security, OEM & Emerging Markets, Maritime, and Detection. The Surveillance segment provides enhanced imaging and recognition solutions for various military, law enforcement, public safety, and other government customers for the protection of borders, troops, and public welfare. This segment also develops hand-held and weapon-mounted thermal imaging systems. The Instruments segment offer devices that image, measure, and assess thermal energy, gases, electricity, and other environmental elements for industrial, commercial, and scientific applications. The Security segment develops and manufactures cameras and video recording systems for use in commercial, critical infrastructure, and home monitoring applications. The OEM & Emerging Markets segment provides thermal and visible-spectrum imaging camera cores and components that are utilized by third parties to create thermal, industrial, and other types of imaging systems. The segment also develops and manufactures intelligent traffic systems; imaging solutions for the smartphone and mobile devices market; and thermal imaging solutions for commercial-use unmanned aerial systems. The Maritime segment develops and manufactures electronics and imaging instruments for the recreational and commercial maritime market under the FLIR and Raymarine brands. The Detection segment offers sensors, instruments, and integrated platform solutions for the detection, identification, and suppression of chemical, biological, radiological, nuclear, and explosives threats for military force protection, homeland security, first responders, and commercial applications. The company was founded in 1978 and is headquartered in Wilsonville, Oregon.

About Harris

Harris Corporation 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, 2-channel vehicular 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 secure communications systems and equipment, including 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 earth observation, environmental, exploration, geospatial, space protection, and intelligence solutions, such as sensors and payloads, as well as ground processing and information analytics for security, defense, civil, and commercial customers; and positioning, navigation, and timing products, systems, and solutions. Further, the company offers electronic warfare, avionics, surveillance and reconnaissance, command, control, communications, computers and intelligence, and undersea systems and solutions for aviation, defense, and maritime applications. Additionally, it provides managed services that support air traffic management; engineering support and sustainment for ground-based systems; and information technology and engineering managed services to government and commercial customers. The company was founded in 1895 and is headquartered in Melbourne, Florida.

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