For those looking to find strong Aerospace stocks, it is prudent to search for companies in the group that are outperforming their peers. General Dynamics (GD) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? By taking a look at the stock's year-to-date performance in comparison to its Aerospace peers, we might be able to answer that question.
General Dynamics is one of 76 companies in the Aerospace group. The Aerospace group currently sits at #2 within the Zacks Sector Rank. The Zacks Sector Rank includes 16 different groups and is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors.
The Zacks Rank emphasizes earnings estimates and estimate revisions to find stocks with improving earnings outlooks. This system has a long record of success, and these stocks tend to be on track to beat the market over the next one to three months. General Dynamics is currently sporting a Zacks Rank of #2 (Buy).
Over the past three months, the Zacks Consensus Estimate for GD's full-year earnings has moved 2.3% higher. This shows that analyst sentiment has improved and the company's earnings outlook is stronger.
Our latest available data shows that GD has returned about 6% since the start of the calendar year. At the same time, Aerospace stocks have lost an average of 8.1%. This shows that General Dynamics is outperforming its peers so far this year.
Another Aerospace stock, which has outperformed the sector so far this year, is Rolls-Royce Holdings PLC (RYCEY). The stock has returned 20.9% year-to-date.
For Rolls-Royce Holdings PLC, the consensus EPS estimate for the current year has increased 15.4% over the past three months. The stock currently has a Zacks Rank #2 (Buy).
Breaking things down more, General Dynamics is a member of the Aerospace - Defense industry, which includes 39 individual companies and currently sits at #99 in the Zacks Industry Rank. On average, this group has lost an average of 8.5% so far this year, meaning that GD is performing better in terms of year-to-date returns.
Rolls-Royce Holdings PLC, however, belongs to the Aerospace - Defense Equipment industry. Currently, this 36-stock industry is ranked #41. The industry has moved -7.2% so far this year.
General Dynamics and Rolls-Royce Holdings PLC could continue their solid performance, so investors interested in Aerospace stocks should continue to pay close attention to these stocks.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention.
See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
General Dynamics Corporation (GD): Free Stock Analysis Report
Rolls-Royce Holdings PLC (RYCEY): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).