Embraer-Empresa Brasileira de Aeronautica (NYSE:EMBJ – Get Free Report) and Transdigm Group (NYSE:TDG – Get Free Report) are both large-cap industrials companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, earnings, analyst recommendations, institutional ownership, dividends, valuation and risk.
Valuation & Earnings
This table compares Embraer-Empresa Brasileira de Aeronautica and Transdigm Group”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Embraer-Empresa Brasileira de Aeronautica | $7.58 billion | 1.80 | $351.90 million | $2.47 | 30.57 |
| Transdigm Group | $8.83 billion | 7.64 | $2.07 billion | $32.96 | 36.59 |
Transdigm Group 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 Transdigm Group, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
34.6% of Embraer-Empresa Brasileira de Aeronautica shares are owned by institutional investors. Comparatively, 95.8% of Transdigm Group shares are owned by institutional investors. 1.0% of Embraer-Empresa Brasileira de Aeronautica shares are owned by company insiders. Comparatively, 3.2% of Transdigm Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Analyst Recommendations
This is a summary of current ratings and target prices for Embraer-Empresa Brasileira de Aeronautica and Transdigm Group, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Embraer-Empresa Brasileira de Aeronautica | 0 | 0 | 3 | 1 | 3.25 |
| Transdigm Group | 0 | 13 | 5 | 0 | 2.28 |
Embraer-Empresa Brasileira de Aeronautica currently has a consensus target price of $92.50, suggesting a potential upside of 22.52%. Transdigm Group has a consensus target price of $1,428.40, suggesting a potential upside of 18.44%. Given Embraer-Empresa Brasileira de Aeronautica’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Embraer-Empresa Brasileira de Aeronautica is more favorable than Transdigm Group.
Profitability
This table compares Embraer-Empresa Brasileira de Aeronautica and Transdigm Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Embraer-Empresa Brasileira de Aeronautica | 5.35% | 11.90% | 3.51% |
| Transdigm Group | 19.69% | -23.65% | 9.12% |
Risk and Volatility
Embraer-Empresa Brasileira de Aeronautica has a beta of 1.5, meaning that its stock price is 50% more volatile than the S&P 500. Comparatively, Transdigm Group has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500.
Summary
Transdigm Group beats Embraer-Empresa Brasileira de Aeronautica on 10 of the 15 factors compared between the two stocks.
About Embraer-Empresa Brasileira de Aeronautica
Embraer S.A. designs, develops, manufactures, and sells aircraft and systems in North America, Latin America, the Asia Pacific, Brazil, Europe, and internationally. The company operates through Commercial Aviation; Defense & Security; Executive Aviation; Services & Support; and Other segments. The Commercial Aviation segment designs, develops, manufactures, and sells commercial jets, as well as leases aircraft. The Defense & Security segment engages in the research, development, production, modification, and support for military defense and security aircraft; and offers a range of products and integrated solutions that include radars, special space systems, and cyber security solutions, as well as information and communications systems comprising command, control, communications, computer, intelligence, surveillance, and reconnaissance systems. The Executive Aviation segment develops, produces, and sells executive jets. This segment also leases Phenom family executive jets in the entry jet and light jet categories; and Praetor 500 and Praetor 600, disruptive executive jets in the midsize and super midsize categories. The Service & Support segment provides after-service solutions and support services; maintenance, repair, and overhaul services for commercial, executive, and defense aircraft; and aircraft components and engines. This segment also supplies steel and composite aviation structures to various aircraft manufacturers. The Other segment engages 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 incorporated in 1969 and is headquartered in São Paulo, Brazil.
About Transdigm Group
TransDigm Group Incorporated designs, produces, and supplies aircraft components in the United States and internationally. The Power & Control segment offers mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, specialized pumps and valves, power conditioning devices, specialized AC/DC electric motors and generators, batteries and chargers, databus and power controls, sensor products, switches and relay panels, hoists, winches and lifting devices, and cargo loading and handling systems. This segment serves engine and power system and subsystem suppliers, airlines, third party maintenance suppliers, military buying agencies, and repair depots. The Airframe segment provides engineered latching and locking devices, engineered rods, engineered connectors and elastomer sealing solutions, cockpit security components and systems, cockpit displays, engineered audio, radio and antenna systems, lavatory components, seat belts and safety restraints, engineered and customized interior surfaces and related components, thermal protection and insulation products, lighting and control technology, and parachutes. This segment serves airframe manufacturers, cabin system and subsystem suppliers, airlines, third party maintenance suppliers, military buying agencies, and repair depots. The Non-aviation segment offers seat belts and safety restraints for ground transportation applications; electro-mechanical actuators for space applications; hydraulic/electromechanical actuators and fuel valves for land-based gas turbines; refueling systems for heavy equipment used in mining, construction, and other industries; and turbine controls for the energy and oil and gas markets. This segment serves off-road vehicle and subsystem suppliers, child restraint system suppliers, and satellite and space system suppliers; and manufacturers of heavy equipment. TransDigm Group Incorporated was founded in 1993 and is based in Cleveland, Ohio.
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