Critical Analysis: MTU Aero Engines (OTCMKTS:MTUAY) vs. Moog (NYSE:MOG.B)

Moog (NYSE:MOG.B) and MTU Aero Engines (OTCMKTS:MTUAY) are both large-cap industrials companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, dividends, profitability, earnings, analyst recommendations, risk and valuation.

Dividends

Moog pays an annual dividend of $1.20 per share and has a dividend yield of 0.4%. MTU Aero Engines pays an annual dividend of $1.49 per share and has a dividend yield of 0.8%. Moog pays out 10.2% of its earnings in the form of a dividend. MTU Aero Engines pays out 14.6% 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.

Profitability

This table compares Moog and MTU Aero Engines’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Moog	8.73%	17.67%	7.94%
MTU Aero Engines	10.43%	22.42%	7.72%

Insider & Institutional Ownership

8.1% of Moog shares are owned by institutional investors. Comparatively, 0.0% of MTU Aero Engines shares are owned by institutional investors. 2.4% of Moog shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

Moog has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500. Comparatively, MTU Aero Engines has a beta of 1.03, indicating that its stock price is 3% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Moog and MTU Aero Engines, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Moog	0	1	0	0	2.00
MTU Aero Engines	2	3	4	1	2.40

Earnings & Valuation

This table compares Moog and MTU Aero Engines”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Moog	$4.32 billion	2.49	$235.03 million	$11.76	28.87
MTU Aero Engines	$9.91 billion	1.93	$1.15 billion	$10.21	17.37

MTU Aero Engines has higher revenue and earnings than Moog. MTU Aero Engines is trading at a lower price-to-earnings ratio than Moog, indicating that it is currently the more affordable of the two stocks.

Summary

MTU Aero Engines beats Moog on 9 of the 16 factors compared between the two stocks.

About Moog

Moog Inc. designs, manufactures, and integrates precision motion and fluid controls and systems for original equipment manufacturers and end users in the aerospace, defense, and industrial markets worldwide. The company's Aircrafts Controls segment offers primary and secondary flight controls for military and commercial aircrafts; aftermarket support services; and ground-based navigation aids. Its Space and Defense Controls segment provides controls for satellites, space vehicles, launch vehicles, armored combat vehicles, tactical and strategic missiles, security and surveillance, and other defense applications; and gun aiming, stabilization, and automatic ammunition loading for armored combat vehicles. This segment also offers steering tactical and strategic missiles; and designs, builds, and integrates weapon stores management systems for light attack aerial reconnaissance, ground, and sea platforms. The company's Industrial Systems segment provides systems for applications in injection and blow molding machinery, metal forming presses, and heavy industry customers in steel and aluminum production; and supplies solutions for power generation applications, electromechanical motion simulation bases, medical training simulators, and custom test systems and controls. This segment also offers systems and components for applications in oil and gas exploration and production; components for wind turbine applications; and components and systems for diagnostic imaging CT scan medical equipment, sleep apnea equipment, oxygen concentrators, infusion therapy, and enteral clinical nutrition. The company was founded in 1951 and is headquartered in East Aurora, New York.

About MTU Aero Engines

MTU Aero Engines AG, together with its subsidiaries, engages in the development, manufacture, marketing, and maintenance of commercial and military aircraft engines, and aero-derivative industrial gas turbines in Germany, other European countries, North America, Asia, and internationally. It operates through two segments: Original Equipment Manufacturing (OEM Business); and Maintenance, Repair, and Overhaul (MRO Business). The company offers commercial aircraft engines for wide body jets, narrow body and regional jets, business jets, and turboprops; military aircraft engines for fighter jets, helicopters, and transporters; and industrial gas turbines. It also maintains, repairs, and overhauls commercial and military engines; and manufactures and markets various spare parts. The company was formerly known as MTU Aero Engines Holding AG and changed its name to MTU Aero Engines AG in May 2013. MTU Aero Engines AG was founded in 1913 and is headquartered in Munich, Germany.