BBA Aviation (OTCMKTS: BBAVY) and Embraer (NYSE:ERJ) are both mid-cap transportation companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitability, valuation, institutional ownership, earnings, risk and dividends.
This is a breakdown of recent ratings and recommmendations for BBA Aviation and Embraer, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Embraer has a consensus price target of $24.43, indicating a potential downside of 0.45%. Given Embraer’s higher probable upside, analysts clearly believe Embraer is more favorable than BBA Aviation.
BBA Aviation pays an annual dividend of $0.86 per share and has a dividend yield of 3.8%. Embraer pays an annual dividend of $0.32 per share and has a dividend yield of 1.3%. BBA Aviation pays out 72.9% of its earnings in the form of a dividend. Embraer pays out 21.1% 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.
Insider and Institutional Ownership
0.1% of BBA Aviation shares are held by institutional investors. Comparatively, 48.2% of Embraer shares are held by institutional investors. 1.0% of Embraer shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Valuation & Earnings
This table compares BBA Aviation and Embraer’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|BBA Aviation||$2.37 billion||1.95||$119.40 million||$1.18||18.96|
|Embraer||$5.84 billion||0.77||$246.80 million||$1.52||16.14|
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.
Risk and Volatility
BBA Aviation has a beta of 1.71, indicating that its stock price is 71% more volatile than the S&P 500. Comparatively, Embraer has a beta of 0.16, indicating that its stock price is 84% less volatile than the S&P 500.
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|
Embraer beats BBA Aviation on 11 of the 16 factors compared between the two stocks.
BBA Aviation Company Profile
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 fueling, 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 partnership 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 non-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 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.
Embraer Company Profile
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, Defense and Security, Executive Jets, 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 Defense and 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 Executive Jets segment develops, produces, and sells executive jets; and offers support services. It also leases 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 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 Paulo, Brazil.
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