Critical Contrast: GE Aerospace (NYSE:GE) and Airbus (OTCMKTS:EADSY)

GE Aerospace (NYSE:GE) and Airbus (OTCMKTS:EADSY) are both large-cap aerospace companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, profitability, dividends and risk.

Risk and Volatility

GE Aerospace has a beta of 1.49, suggesting that its share price is 49% more volatile than the S&P 500. Comparatively, Airbus has a beta of 1.29, suggesting that its share price is 29% more volatile than the S&P 500.

Valuation and Earnings

This table compares GE Aerospace and Airbus”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GE Aerospace	$38.70 billion	8.28	$6.56 billion	$7.49	40.58
Airbus	$74.92 billion	2.55	$4.58 billion	$1.69	35.80

GE Aerospace has higher earnings, but lower revenue than Airbus. Airbus is trading at a lower price-to-earnings ratio than GE Aerospace, indicating that it is currently the more affordable of the two stocks.

Dividends

GE Aerospace pays an annual dividend of $1.44 per share and has a dividend yield of 0.5%. Airbus pays an annual dividend of $0.41 per share and has a dividend yield of 0.7%. GE Aerospace pays out 19.2% of its earnings in the form of a dividend. Airbus pays out 24.3% 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. GE Aerospace has increased its dividend for 2 consecutive years.

Profitability

This table compares GE Aerospace and Airbus’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GE Aerospace	18.34%	34.01%	5.26%
Airbus	7.01%	24.38%	3.85%

Insider & Institutional Ownership

74.8% of GE Aerospace shares are held by institutional investors. Comparatively, 0.3% of Airbus shares are held by institutional investors. 0.2% of GE Aerospace shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations for GE Aerospace and Airbus, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GE Aerospace	0	2	15	0	2.88
Airbus	0	3	5	1	2.78

GE Aerospace currently has a consensus price target of $284.27, suggesting a potential downside of 6.48%. Given GE Aerospace’s stronger consensus rating and higher probable upside, equities research analysts clearly believe GE Aerospace is more favorable than Airbus.

Summary

GE Aerospace beats Airbus on 15 of the 18 factors compared between the two stocks.

About GE Aerospace

GE Aerospace (also known as General Electric) is a company that specializes in providing aerospace products and services. It operates through two reportable segments: Commercial Engines and Services and Defense and Propulsion Technologies. It offers jet and turboprop engines, as well as integrated systems for commercial, military, business, and general aviation aircraft. GE demerged into GE Vernova, GE Aerospace, and GE Healthcare.

About Airbus

Airbus SE, together with its subsidiaries, engages in the design, manufacture, and delivery of aerospace products, services, and solutions worldwide. It operates through three segments: Airbus, Airbus Helicopters, and Airbus Defence and Space. The Airbus segment develops, manufactures, markets, and sells commercial jet passenger aircraft, freighter aircraft, regional turboprop aircraft, and aircraft components, as well as provides aircraft conversion and related services. The Airbus Helicopters segment develops, manufactures, markets, and sells civil and military helicopters; and provides helicopter-related services. The Airbus Defence and Space segment designs, develops, delivers, and supports military air systems and related services. This segment also offers civil and defence space systems for telecommunications, earth observations, navigation, and science and orbital systems; missile and space launcher systems; and services around data processing from platforms, secure communication, and cyber security. The company was formerly known as Airbus Group SE and changed its name to Airbus SE in April 2017. Airbus SE was incorporated in 1998 and is headquartered in Leiden, the Netherlands.