Critical Comparison: Rolls-Royce Holdings PLC (OTCMKTS:RYCEY) vs. MTU Aero Engines (OTCMKTS:MTUAY)

MTU Aero Engines (OTCMKTS:MTUAY) and Rolls-Royce Holdings PLC (OTCMKTS:RYCEY) are both large-cap industrials companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, institutional ownership and earnings.

Volatility and Risk

MTU Aero Engines has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500. Comparatively, Rolls-Royce Holdings PLC has a beta of 1.19, suggesting that its share price is 19% more volatile than the S&P 500.

Profitability

This table compares MTU Aero Engines and Rolls-Royce Holdings PLC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MTU Aero Engines	10.43%	23.33%	8.02%
Rolls-Royce Holdings PLC	N/A	N/A	N/A

Dividends

MTU Aero Engines pays an annual dividend of $1.49 per share and has a dividend yield of 0.7%. Rolls-Royce Holdings PLC pays an annual dividend of $0.16 per share and has a dividend yield of 0.8%. MTU Aero Engines pays out 14.6% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of recent recommendations for MTU Aero Engines and Rolls-Royce Holdings PLC, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MTU Aero Engines	3	4	3	1	2.18
Rolls-Royce Holdings PLC	0	0	4	1	3.20

Insider & Institutional Ownership

0.0% of MTU Aero Engines shares are owned by institutional investors. Comparatively, 0.1% of Rolls-Royce Holdings PLC shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares MTU Aero Engines and Rolls-Royce Holdings PLC”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MTU Aero Engines	$9.91 billion	2.22	$1.15 billion	$10.21	19.97
Rolls-Royce Holdings PLC	$27.96 billion	6.04	$7.70 billion	N/A	N/A

Rolls-Royce Holdings PLC has higher revenue and earnings than MTU Aero Engines.

Summary

Rolls-Royce Holdings PLC beats MTU Aero Engines on 9 of the 12 factors compared between the two stocks.

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.

About Rolls-Royce Holdings PLC

Rolls-Royce Holdings plc develops and delivers complex power and propulsion solutions for air, sea, and land in the United Kingdom and internationally. The company operates through four segments: Civil Aerospace, Defence, Power Systems, and New Markets. The Civil Aerospace segment develops, manufactures, markets, and sells aero engines for large commercial aircraft, regional jet, and business aviation markets, as well as provides aftermarket services. The Defence segment is involved in the development, manufacture, marketing, and sale of military aero engines, naval engines, and submarine nuclear power plants, as well as offers aftermarket services. The Power Systems segment engages in the development, manufacture, marketing, and sale of integrated solutions for onsite power and propulsion under the mtu brand name. The New Markets segment develops, manufactures, and sells small modular reactor and new electrical power solutions. Rolls-Royce Holdings plc was founded in 1884 and is headquartered in London, the United Kingdom.