Head to Head Survey: Airbus (OTCMKTS:EADSY) versus Embraer-Empresa Brasileira de Aeronautica (NYSE:ERJ)

Airbus (OTCMKTS:EADSY) and Embraer-Empresa Brasileira de Aeronautica (NYSE:ERJ) are both large-cap aerospace companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, profitability, risk, institutional ownership, dividends, valuation and earnings.

Volatility & Risk

Airbus has a beta of 1.29, indicating that its share price is 29% more volatile than the S&P 500. Comparatively, Embraer-Empresa Brasileira de Aeronautica has a beta of 1.82, indicating that its share price is 82% more volatile than the S&P 500.

Valuation and Earnings

This table compares Airbus and Embraer-Empresa Brasileira de Aeronautica”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Airbus	$74.92 billion	2.51	$4.58 billion	$1.69	35.11
Embraer-Empresa Brasileira de Aeronautica	$6.39 billion	1.74	$352.50 million	$2.05	29.59

Airbus has higher revenue and earnings than Embraer-Empresa Brasileira de Aeronautica. Embraer-Empresa Brasileira de Aeronautica is trading at a lower price-to-earnings ratio than Airbus, indicating that it is currently the more affordable of the two stocks.

Dividends

Airbus pays an annual dividend of $0.41 per share and has a dividend yield of 0.7%. Embraer-Empresa Brasileira de Aeronautica pays an annual dividend of $0.05 per share and has a dividend yield of 0.1%. Airbus pays out 24.3% of its earnings in the form of a dividend. Embraer-Empresa Brasileira de Aeronautica pays out 2.4% 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.

Institutional & Insider Ownership

0.3% of Airbus shares are held by institutional investors. Comparatively, 34.7% of Embraer-Empresa Brasileira de Aeronautica shares are held by institutional investors. 1.0% of Embraer-Empresa Brasileira de Aeronautica shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Airbus and Embraer-Empresa Brasileira de Aeronautica, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Airbus	0	3	5	1	2.78
Embraer-Empresa Brasileira de Aeronautica	1	2	5	2	2.80

Embraer-Empresa Brasileira de Aeronautica has a consensus target price of $61.17, suggesting a potential upside of 0.84%. Given Embraer-Empresa Brasileira de Aeronautica’s stronger consensus rating and higher probable upside, analysts clearly believe Embraer-Empresa Brasileira de Aeronautica is more favorable than Airbus.

Profitability

This table compares Airbus and Embraer-Empresa Brasileira de Aeronautica’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Airbus	7.01%	24.38%	3.85%
Embraer-Empresa Brasileira de Aeronautica	5.43%	13.38%	3.92%

Summary

Embraer-Empresa Brasileira de Aeronautica beats Airbus on 9 of the 16 factors compared between the two stocks.

About Airbus

Airbus SE, together with its subsidiaries, engages in the design, manufacture, and delivery of aerospace products, services, and solutions worldwide. It operates through three segments: Airbus, Airbus Helicopters, and Airbus Defence and Space. The Airbus segment develops, manufactures, markets, and sells commercial jet passenger aircraft, freighter aircraft, regional turboprop aircraft, and aircraft components, as well as provides aircraft conversion and related services. The Airbus Helicopters segment develops, manufactures, markets, and sells civil and military helicopters; and provides helicopter-related services. The Airbus Defence and Space segment designs, develops, delivers, and supports military air systems and related services. This segment also offers civil and defence space systems for telecommunications, earth observations, navigation, and science and orbital systems; missile and space launcher systems; and services around data processing from platforms, secure communication, and cyber security. The company was formerly known as Airbus Group SE and changed its name to Airbus SE in April 2017. Airbus SE was incorporated in 1998 and is headquartered in Leiden, the Netherlands.

About Embraer-Empresa Brasileira de Aeronautica

Embraer S.A. designs, develops, manufactures, and sells aircraft and systems in North America, Latin America, the Asia Pacific, Brazil, Europe, and internationally. The company operates through Commercial Aviation; Defense & Security; Executive Aviation; Services & Support; and Other segments. The Commercial Aviation segment designs, develops, manufactures, and sells commercial jets, as well as leases aircraft. The Defense & Security segment engages in the research, development, production, modification, and support for military defense and security aircraft; and offers a range of products and integrated solutions that include radars, special space systems, and cyber security solutions, as well as information and communications systems comprising command, control, communications, computer, intelligence, surveillance, and reconnaissance systems. The Executive Aviation segment develops, produces, and sells executive jets. This segment also leases Phenom family executive jets in the entry jet and light jet categories; and Praetor 500 and Praetor 600, disruptive executive jets in the midsize and super midsize categories. The Service & Support segment provides after-service solutions and support services; maintenance, repair, and overhaul services for commercial, executive, and defense aircraft; and aircraft components and engines. This segment also supplies steel and composite aviation structures to various aircraft manufacturers. The Other segment engages in the supply of fuel systems, structural parts, and mechanical and hydraulic systems; and production of agricultural crop-spraying aircraft. The company was formerly known as Embraer-Empresa Brasileira de Aeronáutica S.A. and changed its name to Embraer S.A. in November 2010. Embraer S.A. was incorporated in 1969 and is headquartered in São Paulo, Brazil.