Critical Analysis: Bba Aviation (BBAVY) versus Embraer (ERJ)

Bba Aviation (OTCMKTS: BBAVY) and Embraer (NYSE:ERJ) are both mid-cap transportation companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, dividends, profitability, analyst recommendations, valuation, earnings and institutional ownership.

Profitability

How to Become a New Pot Stock Millionaire

This table compares Bba Aviation and Embraer’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bba Aviation N/A N/A N/A
Embraer 4.23% 6.82% 2.33%

Dividends

Bba Aviation pays an annual dividend of $0.57 per share and has a dividend yield of 2.6%. Embraer pays an annual dividend of $0.06 per share and has a dividend yield of 0.2%. Bba Aviation pays out 59.4% of its earnings in the form of a dividend. Embraer pays out 3.9% 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.

Earnings and Valuation

This table compares Bba Aviation and Embraer’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bba Aviation $2.37 billion 1.94 $119.40 million $0.96 23.20
Embraer $5.84 billion 0.81 $246.80 million $1.52 16.88

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

Volatility and Risk

Bba Aviation has a beta of 1.69, indicating that its stock price is 69% more volatile than the S&P 500. Comparatively, Embraer has a beta of 0.15, indicating that its stock price is 85% less volatile than the S&P 500.

Insider & Institutional Ownership

0.1% of Bba Aviation shares are owned by institutional investors. Comparatively, 48.1% of Embraer shares are owned by institutional investors. 1.0% of Embraer shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations for Bba Aviation and Embraer, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bba Aviation 0 1 1 0 2.50
Embraer 2 4 2 0 2.00

Embraer has a consensus price target of $24.43, indicating a potential downside of 4.76%. Given Embraer’s higher possible upside, analysts clearly believe Embraer is more favorable than Bba Aviation.

Summary

Embraer beats Bba Aviation on 11 of the 16 factors compared between the two stocks.

About Bba Aviation

BBA Aviation plc provides aviation support and aftermarket services to the business and general aviation (B&GA) markets in the United Kingdom, Mainland Europe, North America, and internationally. It operates through Flight Support and Aftermarket Services segments. The company operates Signature Flight Support, a fixed base operation network that offers service support for B&GA travel, including office rentals and other technical services, fuelling, ground handling, passenger and pilot services, and amenities; hangarage for resting and at home aircraft; technical support, line maintenance, and aircraft on ground services through Signature TECHNICAir; and aircraft management and charter services through Gama Aviation Signature Aircraft Management to the passengers, operators, and pilots of the B&GA fleet. It also provides a portfolio of licensed parts and MRO services, including equipment, components, and spare parts for maturing and legacy platforms; transforms on-core products from original equipment manufacturers (OEMs); and provides maintenance, repair, and overhaul services for commercial, B&GA, and military fixed wing and rotorcraft platforms to original equipment manufacturers (OEMs) and their customers. In addition, the company offers engine repair and overhaul services, such as full engine overhaul, scheduled engine repair, on-wing in-field repair, aircraft-on-ground support, engine accessory part, and component repair services to private and commercial operators of aircrafts in the B&GA, regional airline, and rotorcraft fleets. BBA Aviation plc was founded in 1879 and is headquartered in London, the United Kingdom.

About Embraer

Embraer S.A. designs, develops, manufactures, and sells aircraft and systems in Brazil, North America, Latin America, the Asia Pacific, Europe, and internationally. It operates through Commercial Aviation, Executive Jets, Defense & Security, and Other Related Businesses segments. The Commercial Aviation segment develops, produces, and sells commercial jets; and provides support services, as well as leases aircraft. Its products include ERJ 145 family, EMBRAER 170/190 family, and E-Jets family of commercial aircraft. The Executive Jets segment develops, produces, and sells executive jets; and offers support services, as well as leases aircraft. It provides Legacy 600 and Legacy 650 executive jets in the super midsize and large categories; Legacy 450 and Legacy 500 executive jets in the midlight and midsize categories; Phenom family executive jets in the entry jet and light jet categories; and Lineage 1000, an ultra-large executive jet. The Defense & Security segment engages in the research, development, production, modification, and support for military defense and security aircraft, as well as offers a range of products and integrated solutions that include radars, special space systems (satellites), and information and communications systems, such as command, control, communications, computer, intelligence, surveillance, and reconnaissance systems. The Other Related Businesses segment is involved 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 founded in 1969 and is headquartered in São José dos Campos, Brazil.

Receive News & Ratings for Bba Aviation Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Bba Aviation and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply