TDG vs DRS

For growth investors, Leonardo DRS, Inc.

(DRS) is the stronger pick with 12. 8% revenue growth year-over-year, versus 11. 2% for TransDigm Group Incorporated (TDG). TransDigm Group Incorporated (TDG) offers the better valuation at 38. 7x trailing P/E (32. 0x forward), making it the more compelling value choice. Analysts rate TransDigm Group Incorporated (TDG) a "Buy" — based on 39 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.

On trailing P/E, TransDigm Group Incorporated (TDG) is the cheapest at 38.

7x versus Leonardo DRS, Inc. at 40. 2x. On forward P/E, TransDigm Group Incorporated is actually cheaper at 32. 0x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: TransDigm Group Incorporated wins at 1. 03x versus Leonardo DRS, Inc. 's 2. 63x — a reasonable growth-adjusted valuation.

Over the past 5 years, Leonardo DRS, Inc.

(DRS) delivered a total return of +231. 9%, compared to +140. 2% for TransDigm Group Incorporated (TDG). Over 10 years, the gap is even starker: DRS returned +54. 1% versus TDG's +595. 3%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.

By beta (market sensitivity over 5 years), TransDigm Group Incorporated (TDG) is the lower-risk stock at 0.

79β versus Leonardo DRS, Inc. 's 0. 95β — meaning DRS is approximately 21% more volatile than TDG relative to the S&P 500.

By revenue growth (latest reported year), Leonardo DRS, Inc.

(DRS) is pulling ahead at 12. 8% versus 11. 2% for TransDigm Group Incorporated (TDG). On earnings-per-share growth, the picture is similar: Leonardo DRS, Inc. grew EPS 28. 7% year-over-year, compared to 25. 2% for TransDigm Group Incorporated. Over a 3-year CAGR, TDG leads at 17. 6% annualised revenue growth. Higher growth typically commands a higher valuation multiple — check whether the premium P/E or P/S is justified by the growth rate using the PEG ratio.

TransDigm Group Incorporated (TDG) is the more profitable company, earning 23.

5% net margin versus 7. 6% for Leonardo DRS, Inc. — meaning it keeps 23. 5% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: TDG leads at 47. 2% versus 9. 5% for DRS. At the gross margin level — before operating expenses — TDG leads at 60. 1%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.

The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential.

By this metric, TransDigm Group Incorporated (TDG) is the more undervalued stock at a PEG of 1. 03x versus Leonardo DRS, Inc. 's 2. 63x. A PEG below 1. 5 suggests fair-to-attractive pricing relative to expected growth. On forward earnings alone, TransDigm Group Incorporated (TDG) trades at 32. 0x forward P/E versus 33. 0x for Leonardo DRS, Inc. — 1. 0x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for TDG: 30. 3% to $1617. 88.

All stocks in this comparison pay dividends.

TransDigm Group Incorporated (TDG) offers the highest yield at 13. 3%, versus 0. 9% for Leonardo DRS, Inc. (DRS).

For long-horizon retirement investors, TransDigm Group Incorporated (TDG) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0.

79), 13. 3% yield, +595. 3% 10Y return). Both have compounded well over 10 years (TDG: +595. 3%, DRS: +54. 1%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.

Both stocks operate in the Industrials sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both.

In terms of investment character: TDG is a mid-cap income-oriented stock; DRS is a mid-cap quality compounder stock. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.