L3HARRIS TECHNOLOGIES INC (LHX) Stock Fundamental Analysis
NYSE:LHX - New York Stock Exchange, Inc. - US5024311095 - Common Stock - Currency: USD
Overall LHX gets a fundamental rating of 4 out of 10. We evaluated LHX against 64 industry peers in the Aerospace & Defense industry. While LHX is still in line with the averages on profitability rating, there are concerns on its financial health. LHX has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year LHX was profitable.
LHX had a positive operating cash flow in the past year.
Each year in the past 5 years LHX has been profitable.
In the past 5 years LHX always reported a positive cash flow from operatings.
1.2 Ratios
LHX's Return On Assets of 3.58% is in line compared to the rest of the industry. LHX outperforms 57.81% of its industry peers.
Looking at the Return On Equity, with a value of 7.70%, LHX is in line with its industry, outperforming 59.38% of the companies in the same industry.
LHX has a Return On Invested Capital (5.31%) which is in line with its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for LHX is below the industry average of 7.79%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.58% | ||
| ROE | 7.7% | ||
| ROIC | 5.31% |
ROA(3y)3.23%
ROA(5y)3.61%
ROE(3y)6.66%
ROE(5y)7%
ROIC(3y)5.34%
ROIC(5y)5.33%
1.3 Margins
The Profit Margin of LHX (7.04%) is better than 70.31% of its industry peers.
LHX's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 10.99%, LHX is in the better half of the industry, outperforming 73.44% of the companies in the same industry.
LHX's Operating Margin has declined in the last couple of years.
LHX's Gross Margin of 25.90% is in line compared to the rest of the industry. LHX outperforms 56.25% of its industry peers.
LHX's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 10.99% | ||
| PM (TTM) | 7.04% | ||
| GM | 25.9% |
OM growth 3Y-4.16%
OM growth 5Y-7.3%
PM growth 3Y-12.08%
PM growth 5Y-12.74%
GM growth 3Y-4.96%
GM growth 5Y-5.47%
2. Health
2.1 Basic Checks
LHX has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
LHX has about the same amout of shares outstanding than it did 1 year ago.
LHX has more shares outstanding than it did 5 years ago.
LHX has a better debt/assets ratio than last year.
2.2 Solvency
LHX has an Altman-Z score of 1.93. This is not the best score and indicates that LHX is in the grey zone with still only limited risk for bankruptcy at the moment.
LHX has a worse Altman-Z score (1.93) than 67.19% of its industry peers.
LHX has a debt to FCF ratio of 5.69. This is a neutral value as LHX would need 5.69 years to pay back of all of its debts.
The Debt to FCF ratio of LHX (5.69) is better than 67.19% of its industry peers.
A Debt/Equity ratio of 0.59 indicates that LHX is somewhat dependend on debt financing.
LHX's Debt to Equity ratio of 0.59 is in line compared to the rest of the industry. LHX outperforms 46.88% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.59 | ||
| Debt/FCF | 5.69 | ||
| Altman-Z | 1.93 |
ROIC/WACC0.57
WACC9.39%
2.3 Liquidity
LHX has a Current Ratio of 1.08. This is a normal value and indicates that LHX is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.08, LHX is doing worse than 82.81% of the companies in the same industry.
A Quick Ratio of 0.90 indicates that LHX may have some problems paying its short term obligations.
LHX's Quick ratio of 0.90 is on the low side compared to the rest of the industry. LHX is outperformed by 70.31% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.08 | ||
| Quick Ratio | 0.9 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 5.98% over the past year.
Measured over the past 5 years, LHX shows a small growth in Earnings Per Share. The EPS has been growing by 0.14% on average per year.
The Revenue has grown by 9.82% in the past year. This is quite good.
LHX shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 25.68% yearly.
EPS 1Y (TTM)5.98%
EPS 3Y0.41%
EPS 5Y0.14%
EPS Q2Q%3.58%
Revenue 1Y (TTM)9.82%
Revenue growth 3Y6.18%
Revenue growth 5Y25.68%
Sales Q2Q%3.43%
3.2 Future
LHX is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.73% yearly.
The Revenue is expected to grow by 4.79% on average over the next years.
EPS Next Y-17.09%
EPS Next 2Y-2.95%
EPS Next 3Y1.99%
EPS Next 5Y6.73%
Revenue Next Year3.18%
Revenue Next 2Y3.81%
Revenue Next 3Y4.05%
Revenue Next 5Y4.79%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 16.65 indicates a correct valuation of LHX.
LHX's Price/Earnings ratio is rather cheap when compared to the industry. LHX is cheaper than 89.06% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.29, LHX is valued a bit cheaper.
LHX is valuated rather expensively with a Price/Forward Earnings ratio of 20.08.
Based on the Price/Forward Earnings ratio, LHX is valued cheaply inside the industry as 81.25% of the companies are valued more expensively.
LHX's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 21.08.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.65 | ||
| Fwd PE | 20.08 |
4.2 Price Multiples
78.13% of the companies in the same industry are more expensive than LHX, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, LHX is valued cheaply inside the industry as 92.19% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.04 | ||
| EV/EBITDA | 14.33 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)115.93
EPS Next 2Y-2.95%
EPS Next 3Y1.99%
5. Dividend
5.1 Amount
LHX has a Yearly Dividend Yield of 2.20%. Purely for dividend investing, there may be better candidates out there.
LHX's Dividend Yield is rather good when compared to the industry average which is at 1.39. LHX pays more dividend than 93.75% of the companies in the same industry.
LHX's Dividend Yield is comparable with the S&P500 average which is at 2.52.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.2% |
5.2 History
The dividend of LHX is nicely growing with an annual growth rate of 16.34%!
LHX has been paying a dividend for at least 10 years, so it has a reliable track record.
LHX has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)16.34%
Div Incr Years21
Div Non Decr Years24
5.3 Sustainability
LHX pays out 58.99% of its income as dividend. This is a bit on the high side, but may be sustainable.
LHX's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP58.99%
EPS Next 2Y-2.95%
EPS Next 3Y1.99%
218.22
-0.66 (-0.3%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners87.74%
Inst Owner Change0%
Ins Owners0.31%
Ins Owner Change2.56%
Market Cap40.96B
Analysts79.29
Price Target258.53 (18.47%)
Short Float %1.68%
Short Ratio2.29
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.2% |
Yearly Dividend4.56
Dividend Growth(5Y)16.34%
DP58.99%
Div Incr Years21
Div Non Decr Years24
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.02%
Min EPS beat(2)0.54%
Max EPS beat(2)1.5%
EPS beat(4)4
Avg EPS beat(4)1.87%
Min EPS beat(4)0.54%
Max EPS beat(4)4.46%
EPS beat(8)6
Avg EPS beat(8)1.38%
EPS beat(12)8
Avg EPS beat(12)0.64%
EPS beat(16)11
Avg EPS beat(16)1.02%
Revenue beat(2)0
Avg Revenue beat(2)-0.69%
Min Revenue beat(2)-0.75%
Max Revenue beat(2)-0.63%
Revenue beat(4)1
Avg Revenue beat(4)-0.33%
Min Revenue beat(4)-0.97%
Max Revenue beat(4)1.05%
Revenue beat(8)4
Avg Revenue beat(8)1.4%
Revenue beat(12)5
Avg Revenue beat(12)0.52%
Revenue beat(16)5
Avg Revenue beat(16)-0.36%
PT rev (1m)-0.8%
PT rev (3m)-8.08%
EPS NQ rev (1m)-1.73%
EPS NQ rev (3m)-30.35%
EPS NY rev (1m)-1.43%
EPS NY rev (3m)-25.21%
Revenue NQ rev (1m)-1.07%
Revenue NQ rev (3m)-2.19%
Revenue NY rev (1m)-0.59%
Revenue NY rev (3m)0.31%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.65 | ||
| Fwd PE | 20.08 | ||
| P/S | 1.92 | ||
| P/FCF | 19.04 | ||
| P/OCF | 16.01 | ||
| P/B | 2.1 | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.33 |
EPS(TTM)13.11
EY6.01%
EPS(NY)10.87
Fwd EY4.98%
FCF(TTM)11.46
FCFY5.25%
OCF(TTM)13.63
OCFY6.25%
SpS113.6
BVpS103.95
TBVpS-45.01
PEG (NY)N/A
PEG (5Y)115.93
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.58% | ||
| ROE | 7.7% | ||
| ROCE | 6.82% | ||
| ROIC | 5.31% | ||
| ROICexc | 5.4% | ||
| ROICexgc | 29.37% | ||
| OM | 10.99% | ||
| PM (TTM) | 7.04% | ||
| GM | 25.9% | ||
| FCFM | 10.09% |
ROA(3y)3.23%
ROA(5y)3.61%
ROE(3y)6.66%
ROE(5y)7%
ROIC(3y)5.34%
ROIC(5y)5.33%
ROICexc(3y)5.46%
ROICexc(5y)5.48%
ROICexgc(3y)34.15%
ROICexgc(5y)35.26%
ROCE(3y)6.89%
ROCE(5y)6.83%
ROICexcg growth 3Y-9.8%
ROICexcg growth 5Y-16.22%
ROICexc growth 3Y-3.5%
ROICexc growth 5Y-14.2%
OM growth 3Y-4.16%
OM growth 5Y-7.3%
PM growth 3Y-12.08%
PM growth 5Y-12.74%
GM growth 3Y-4.96%
GM growth 5Y-5.47%
F-Score8
Asset Turnover0.51
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.59 | ||
| Debt/FCF | 5.69 | ||
| Debt/EBITDA | 3.19 | ||
| Cap/Depr | 31.65% | ||
| Cap/Sales | 1.91% | ||
| Interest Coverage | 3.58 | ||
| Cash Conversion | 70.44% | ||
| Profit Quality | 143.21% | ||
| Current Ratio | 1.08 | ||
| Quick Ratio | 0.9 | ||
| Altman-Z | 1.93 |
F-Score8
WACC9.39%
ROIC/WACC0.57
Cap/Depr(3y)32.34%
Cap/Depr(5y)33.61%
Cap/Sales(3y)1.9%
Cap/Sales(5y)1.93%
Profit Quality(3y)152.3%
Profit Quality(5y)160.08%
High Growth Momentum
Growth
EPS 1Y (TTM)5.98%
EPS 3Y0.41%
EPS 5Y0.14%
EPS Q2Q%3.58%
EPS Next Y-17.09%
EPS Next 2Y-2.95%
EPS Next 3Y1.99%
EPS Next 5Y6.73%
Revenue 1Y (TTM)9.82%
Revenue growth 3Y6.18%
Revenue growth 5Y25.68%
Sales Q2Q%3.43%
Revenue Next Year3.18%
Revenue Next 2Y3.81%
Revenue Next 3Y4.05%
Revenue Next 5Y4.79%
EBIT growth 1Y9.53%
EBIT growth 3Y1.77%
EBIT growth 5Y16.51%
EBIT Next Year29.76%
EBIT Next 3Y12.84%
EBIT Next 5Y5.16%
FCF growth 1Y30.6%
FCF growth 3Y-2.84%
FCF growth 5Y16%
OCF growth 1Y22.09%
OCF growth 3Y-1.61%
OCF growth 5Y16.65%