Embraer-Empresa Brasileira de Aeronautica (NYSE: ERJ) and Boeing Company (The) (NYSE:BA) are both large-cap aerospace companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, risk, valuation, profitability and institutional ownership.
Profitability
This table compares Embraer-Empresa Brasileira de Aeronautica and Boeing Company (The)’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Embraer-Empresa Brasileira de Aeronautica | 4.15% | 11.02% | 3.62% |
| Boeing Company (The) | 7.84% | 2,185.10% | 7.34% |
Earnings and Valuation
This table compares Embraer-Empresa Brasileira de Aeronautica and Boeing Company (The)’s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Embraer-Empresa Brasileira de Aeronautica | $6.56 billion | 2.42 | $469.42 million | $1.43 | 15.12 |
| Boeing Company (The) | $90.90 billion | 1.54 | $10.73 billion | $11.42 | 20.80 |
Boeing Company (The) 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 Boeing Company (The), indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of current recommendations for Embraer-Empresa Brasileira de Aeronautica and Boeing Company (The), as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Embraer-Empresa Brasileira de Aeronautica | 1 | 2 | 3 | 0 | 2.33 |
| Boeing Company (The) | 2 | 8 | 13 | 0 | 2.48 |
Embraer-Empresa Brasileira de Aeronautica presently has a consensus price target of $21.00, suggesting a potential downside of 2.87%. Boeing Company (The) has a consensus price target of $225.57, suggesting a potential downside of 5.06%. Given Embraer-Empresa Brasileira de Aeronautica’s higher possible upside, analysts clearly believe Embraer-Empresa Brasileira de Aeronautica is more favorable than Boeing Company (The).
Institutional and Insider Ownership
49.8% of Embraer-Empresa Brasileira de Aeronautica shares are owned by institutional investors. Comparatively, 74.4% of Boeing Company (The) shares are owned by institutional investors. 1.0% of Embraer-Empresa Brasileira de Aeronautica shares are owned by insiders. Comparatively, 0.3% of Boeing Company (The) shares are owned 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.
Dividends
Embraer-Empresa Brasileira de Aeronautica pays an annual dividend of $0.21 per share and has a dividend yield of 1.0%. Boeing Company (The) pays an annual dividend of $5.68 per share and has a dividend yield of 2.4%. Embraer-Empresa Brasileira de Aeronautica pays out 14.7% of its earnings in the form of a dividend. Boeing Company (The) pays out 49.7% 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. Boeing Company (The) has raised its dividend for 5 consecutive years. Boeing Company (The) is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk & Volatility
Embraer-Empresa Brasileira de Aeronautica has a beta of 0.37, meaning that its stock price is 63% less volatile than the S&P 500. Comparatively, Boeing Company (The) has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500.
Summary
Boeing Company (The) beats Embraer-Empresa Brasileira de Aeronautica on 12 of the 17 factors compared between the two stocks.
About Embraer-Empresa Brasileira de Aeronautica
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.
About Boeing Company (The)
The Boeing Company is an aerospace company. The Company’s segments include Commercial Airplanes; Defense, Space & Security (BDS), such as Boeing Military Aircraft (BMA), Network & Space Systems (N&SS) and Global Services & Support (GS&S), and Boeing Capital (BCC). The Commercial Airplanes segment develops, produces and markets commercial jet aircraft and provides related support services, to the commercial airline industry. The Commercial Airplanes segment also produces commercial aircraft and offers a family of commercial jetliners. The BDS segment’s operations involve research, development, production, modification and support of the products and related systems. The BMA segment is engaged in the research, development, production and modification of manned and unmanned military aircraft and weapons systems. The BCC segment’s portfolio consists of equipment under operating leases, finance leases, notes and other receivables, assets held for sale or re-lease and investments.
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