Image source: Rolls-Royce Holdings plc
Rolls-Royce Holdings shares have hit all the headlines this year, with the price up 150% in the past 12 months. Does the valuation look a bit toppy, though?
On a forecast price-to-earnings (P/E) ratio of 28, I think it just might be. At least for now.
But I think other aerospace and defence stocks have passed under the radar. And I reckon QinetiQ (LSE: QQ.) could be one of them.
Strong forecasts
Both companies are on strong forecasts for the next few years. And while I do rate Rolls-Royce as a quality company for a long-term buy, I’m more drawn to the QinetiQ valuation.
Forecasts put the P/E at 15, and down to 12 by 2026. Dividends are expected to be a bit better too, at 2% to 2.5%, though it does look like Rolls should catch up.
On top of that, QinetiQ launched a new share buyback at Q3 results time in January.
Buyback
CEO Steve Wadey said: “Given…
