Financial Review: MTU Aero Engines (OTCMKTS:MTUAY) vs. ATI (NYSE:ATI)

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

Dividends

ATI pays an annual dividend of $0.32 per share and has a dividend yield of 0.2%. MTU Aero Engines pays an annual dividend of $1.49 per share and has a dividend yield of 0.7%. ATI pays out 8.0% of its earnings in the form of a dividend. MTU Aero Engines pays out 15.0% 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 ATI and MTU Aero Engines’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ATI	11.08%	32.30%	11.84%
MTU Aero Engines	9.87%	22.52%	7.75%

Insider & Institutional Ownership

0.0% of MTU Aero Engines shares are owned by institutional investors. 1.0% of ATI shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Volatility & Risk

ATI has a beta of 1.09, meaning that its share price is 9% more volatile than the S&P 500. Comparatively, MTU Aero Engines has a beta of 1.1, meaning that its share price is 10% more volatile than the S&P 500.

Valuation & Earnings

This table compares ATI and MTU Aero Engines”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ATI	$5.01 billion	5.08	$404.30 million	$4.00	46.90
MTU Aero Engines	$9.91 billion	2.17	$1.15 billion	$9.91	20.15

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

Analyst Ratings

This is a breakdown of current ratings and target prices for ATI and MTU Aero Engines, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ATI	0	1	9	1	3.00
MTU Aero Engines	3	2	4	1	2.30

ATI currently has a consensus target price of $222.22, suggesting a potential upside of 18.45%. Given ATI’s stronger consensus rating and higher probable upside, analysts plainly believe ATI is more favorable than MTU Aero Engines.

Summary

ATI beats MTU Aero Engines on 10 of the 16 factors compared between the two stocks.

About ATI

ATI Inc. produces specialty materials and components for aerospace and defense, energy, medical, and other industrial markets. Its materials include titanium and titanium alloys, nickel- and cobalt-based alloys, specialty stainless steels, and other engineered metals designed for demanding applications. The company makes products such as sheet, plate, strip, and bar, along with precision forgings, castings, and engineered components. ATI serves customers worldwide through manufacturing and distribution operations in North America and other regions.

About MTU Aero Engines

MTU Aero Engines AG is a German aerospace company that develops, manufactures and supports engines and engine components for commercial and military aircraft. Its work includes designing and producing specialized modules and parts, such as high-pressure compressors and low-pressure turbines, often in collaboration with international engine manufacturers. The company also provides maintenance, repair and overhaul services for aircraft engines and components. Through facilities and service operations in multiple regions, MTU supports airlines, engine manufacturers and other customers around the world.