Raytheon Company (RTN) is making headlines this week for landing a $2.4 billion contract to supply 10 Patriot missile defense systems to Qatar by 2019. Is it prime time to Raytheon stock?
Raytheon – Company Overview
Raytheon Company is a major American defense contractor, which specializes in weapons and military electronics.
Throughout its 90-year history, Raytheon has served a wide base of public and private clients, oftentimes in conjunction with some of its biggest competitors, including Boeing Co (BA), Lockheed Martin Corporation (LMT) and Northrop Grumman Corporation (NOC).
Raytheon Comapny employs approximately 63,000 worldwide and brought in nearly $24 billion in sales last year.
Raytheon – Earnings Outlook
Raytheon always has something in the works. In addition to the new $2.4 billion contract with Qatar, the defense contractor was recently awarded $148 million between four contracts with the Department of Defense.
Raytheon is expected to report fiscal fourth-quarter earnings at the end of January, and it’s shaping up to be a solid report. Earnings are expected to grow an impressive 21.9%, which is above the industry average of 17.3%. Sales are expected to rise 3.4%, and that’s including U.S. budget cuts.
Yield-seekers may like to know that RTN stock pays a solid 2.3% dividend. RTN stock’s next ex-dividend date is on Jan. 5. RTN shareholders of record will receive 6.05 cents per share on Feb. 5.
Raytheon – Current Ratings
RTN stock has great buying pressure, earning an impressive A for its Quantitative Grade. On the fundamentals front, though, Raytheon still has room for improvement.
Raytheon is struggling in terms of sales growth (F). Earnings surprises (C), earnings momentum (C), earnings growth (C) and analyst earnings revisions (C) are also lackluster. My hope is that some of these grades will firm up with its next earnings report.
At the same time, Raytheon is doing well in terms of cash flow (B), return on equity (A) and operating margin growth (B). RTN stock’s overall grade is a solid B.
As of this posting on Dec. 22, 2014, RTN is a B-rated “buy” (indicating solid growth potential).
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
