Financial Contrast: Science Applications International (NASDAQ:SAIC) and Leidos (NYSE:LDOS)

Leidos (NYSE:LDOS) and Science Applications International (NASDAQ:SAIC) are both computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, valuation, analyst recommendations, profitability, risk, earnings and institutional ownership.

Earnings & Valuation

This table compares Leidos and Science Applications International”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Leidos	$16.66 billion	1.45	$1.25 billion	$10.72	17.65
Science Applications International	$7.48 billion	0.54	$362.00 million	$8.26	10.55

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

Dividends

Leidos pays an annual dividend of $1.60 per share and has a dividend yield of 0.8%. Science Applications International pays an annual dividend of $1.48 per share and has a dividend yield of 1.7%. Leidos pays out 14.9% of its earnings in the form of a dividend. Science Applications International pays out 17.9% 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. Leidos has increased its dividend for 6 consecutive years.

Analyst Recommendations

This is a breakdown of recent recommendations for Leidos and Science Applications International, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Leidos	0	7	10	0	2.59
Science Applications International	0	1	0	0	2.00

Leidos currently has a consensus price target of $199.23, indicating a potential upside of 5.30%. Given Leidos’ stronger consensus rating and higher possible upside, equities analysts plainly believe Leidos is more favorable than Science Applications International.

Insider and Institutional Ownership

76.1% of Leidos shares are held by institutional investors. Comparatively, 76.0% of Science Applications International shares are held by institutional investors. 0.7% of Leidos shares are held by insiders. Comparatively, 0.7% of Science Applications International shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Leidos and Science Applications International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Leidos	8.11%	33.02%	11.40%
Science Applications International	5.35%	33.36%	9.90%

Risk and Volatility

Leidos has a beta of 0.69, indicating that its stock price is 31% less volatile than the S&P 500. Comparatively, Science Applications International has a beta of 0.43, indicating that its stock price is 57% less volatile than the S&P 500.

Summary

Leidos beats Science Applications International on 15 of the 17 factors compared between the two stocks.

About Leidos

Leidos Holdings, Inc., together with its subsidiaries, provides services and solutions in the defense, intelligence, civil, and health markets in the United States and internationally. The company operates through Defense Solutions, Civil, and Health segments. The Defense Solutions segment offers national security solutions and systems for air, land, sea, space, and cyberspace for the U.S. Intelligence Community, the Department of Defense, the space development agency, the National Aeronautics and Space Administration, defense information systems agency, military services, and government agencies of U.S. allies abroad, as well as other federal and commercial customers in the national security industry. The solutions include technology, large-scale systems, command and control platforms, data analytics, logistics, and cybersecurity solutions, as well as intelligence analysis and operations support services to critical missions. The Civil segment provides systems integration services to air navigation service providers, including the federal aviation administration, the En route automation modernization, advanced technology oceanic procedure, time based flow management, terminal flight data management, geo-7, and future flight services, as well as enterprise-information display systems; and security detection services. It also offers information technology (IT) solutions in cloud computing, mobility, application modernization, DevOps, data center, network modernization, asset management, help desk operations, and digital workplace enablement; and environment, energy, and infrastructure services. The Health segment offers solutions to federal and commercial customers responsible for health and well-being of people, include health information management, managed health, digital modernization, and life sciences research and development services. Leidos Holdings, Inc. was founded in 1969 and is headquartered in Reston, Virginia.

About Science Applications International

Science Applications International Corporation provides technical, engineering, and enterprise information technology (IT) services primarily in the United States. The company’s offerings include engineering; technology integration; IT modernization; maintenance of ground and maritime systems; logistics; training and simulation; operation and program support services; and end-to-end services, such as design, development, integration, deployment, management and operations, sustainment, and security of its customers’ IT infrastructure, as well as cloud migration, managed services, infrastructure modernization, and enterprise IT-as-a-service solutions. It serves the U.S. military comprising Army, Air Force, Navy, Marines, and Coast Guard; Department of Defense agencies; National Aeronautics and Space Administration; the U.S. Department of State; Department of Justice; Department of Homeland Security; and various intelligence community agencies, as well as U.S. federal civilian agencies. The company was formerly known as SAIC Gemini, Inc. and changed its name to Science Applications International Corporation in September 2013. Science Applications International Corporation was founded in 1969 and is headquartered in Reston, Virginia.