Spirit AeroSystems (NYSE: SPR) and Embraer (NYSE:ERJ) are both mid-cap aerospace companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, institutional ownership, risk, profitability, valuation, analyst recommendations and earnings.
This is a breakdown of current recommendations for Spirit AeroSystems and Embraer, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Spirit AeroSystems currently has a consensus target price of $99.75, indicating a potential upside of 19.52%. Embraer has a consensus target price of $24.43, indicating a potential downside of 4.43%. Given Spirit AeroSystems’ stronger consensus rating and higher possible upside, analysts clearly believe Spirit AeroSystems is more favorable than Embraer.
This table compares Spirit AeroSystems and Embraer’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Earnings & Valuation
This table compares Spirit AeroSystems and Embraer’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Spirit AeroSystems||$6.98 billion||1.37||$354.90 million||$3.02||27.64|
|Embraer||$5.84 billion||0.80||$246.80 million||$1.34||19.07|
Spirit AeroSystems has higher revenue and earnings than Embraer. Embraer is trading at a lower price-to-earnings ratio than Spirit AeroSystems, indicating that it is currently the more affordable of the two stocks.
Spirit AeroSystems pays an annual dividend of $0.40 per share and has a dividend yield of 0.5%. Embraer pays an annual dividend of $0.06 per share and has a dividend yield of 0.2%. Spirit AeroSystems pays out 13.2% of its earnings in the form of a dividend. Embraer pays out 4.5% 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 and Insider Ownership
97.5% of Spirit AeroSystems shares are held by institutional investors. Comparatively, 48.1% of Embraer shares are held by institutional investors. 0.9% of Spirit AeroSystems shares are held by insiders. Comparatively, 1.0% of Embraer shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Risk & Volatility
Spirit AeroSystems has a beta of 1.45, meaning that its share price is 45% more volatile than the S&P 500. Comparatively, Embraer has a beta of 0.16, meaning that its share price is 84% less volatile than the S&P 500.
Spirit AeroSystems beats Embraer on 13 of the 16 factors compared between the two stocks.
About Spirit AeroSystems
Spirit AeroSystems Holdings, Inc. is a non-original equipment manufacturer (OEM), aircraft parts designer and manufacturer of commercial aero-structures. The Company is also a supplier of aero-structures. The Company operates through three segments: Fuselage Systems, Propulsion Systems and Wing Systems. The Fuselage Systems segment includes the development, production and marketing of forward, mid and rear fuselage sections and systems. The Propulsion Systems segment includes the development, production and marketing of struts/pylons, nacelles (including thrust reversers) and related engine structural components. The Wing Systems segment includes the development, production and marketing of wings and wing components (including flight control surfaces), and other miscellaneous structural parts. The Company’s maintenance, repair and overhaul (MRO) services include repair stations that provide complete on-site repair and overhaul.
Embraer S.A. (Embraer) is a manufacturer of jets of 70 to 130 seats. The Company produces aircraft for commercial and executive aviation, and for defense and security purposes and related services. Its segments include Commercial aviation business, which involves the development, production and sale of commercial jets, and rendering of support services, particularly in the regional aviation segment and aircraft leases; Executive Jet business, which markets its executive jets to companies, including fractional ownership companies, charter and air-taxi companies, high-net-worth individuals and to flight academies; Defense and Security Business segment, which conceives, designs, develops, manufactures and supports a range of integrated solutions for the defense and security market, and Other Related Businesses segment, which provides fuel systems, structural parts, and mechanical and hydraulic systems to Sikorsky Aircraft Corporation for its production of helicopters.
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