Embraer (NYSE: ERJ) and Bba Aviation (OTCMKTS:BBAVY) are both mid-cap aerospace companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, dividends, risk, profitability, institutional ownership, valuation and analyst recommendations.
Earnings & Valuation
This table compares Embraer and Bba Aviation’s top-line revenue, earnings per share and valuation.
||Earnings Per Share
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.
This table compares Embraer and Bba Aviation’s net margins, return on equity and return on assets.
||Return on Equity
||Return on Assets
Embraer pays an annual dividend of $0.06 per share and has a dividend yield of 0.2%. Bba Aviation pays an annual dividend of $0.17 per share and has a dividend yield of 0.8%. Embraer pays out 3.9% of its earnings in the form of a dividend. Bba Aviation pays out 17.7% 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
48.1% of Embraer shares are held by institutional investors. Comparatively, 0.1% of Bba Aviation shares are held by institutional investors. 1.0% of Embraer shares are held by company 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.
This is a breakdown of recent ratings and target prices for Embraer and Bba Aviation, as provided by MarketBeat.com.
||Strong Buy Ratings
Embraer presently has a consensus target price of $24.43, suggesting a potential downside of 4.76%. Given Embraer’s higher probable upside, equities analysts clearly believe Embraer is more favorable than Bba Aviation.
Volatility & Risk
Embraer has a beta of 0.15, meaning that its share price is 85% less volatile than the S&P 500. Comparatively, Bba Aviation has a beta of 1.69, meaning that its share price is 69% more volatile than the S&P 500.
Embraer beats Bba Aviation on 11 of the 15 factors compared between the two stocks.
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.
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.
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