MTU Aero Engines (OTCMKTS:MTUAY – Get Free Report) and Lockheed Martin (NYSE:LMT – Get Free Report) are both large-cap aerospace companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, profitability, analyst recommendations, institutional ownership and risk.
Valuation & Earnings
This table compares MTU Aero Engines and Lockheed Martin”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| MTU Aero Engines | $9.91 billion | 1.99 | $1.15 billion | $10.69 | 17.13 |
| Lockheed Martin | $75.05 billion | 1.65 | $5.02 billion | $20.65 | 26.00 |
Insider and Institutional Ownership
0.0% of MTU Aero Engines shares are owned by institutional investors. Comparatively, 74.2% of Lockheed Martin shares are owned by institutional investors. 0.1% of Lockheed Martin shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Dividends
MTU Aero Engines pays an annual dividend of $1.49 per share and has a dividend yield of 0.8%. Lockheed Martin pays an annual dividend of $13.80 per share and has a dividend yield of 2.6%. MTU Aero Engines pays out 13.9% of its earnings in the form of a dividend. Lockheed Martin pays out 66.8% 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. Lockheed Martin has raised its dividend for 22 consecutive years. Lockheed Martin is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk and Volatility
MTU Aero Engines has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500. Comparatively, Lockheed Martin has a beta of 0.1, indicating that its stock price is 90% less volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of current ratings and price targets for MTU Aero Engines and Lockheed Martin, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| MTU Aero Engines | 2 | 4 | 3 | 1 | 2.30 |
| Lockheed Martin | 1 | 12 | 7 | 1 | 2.38 |
Lockheed Martin has a consensus target price of $620.68, indicating a potential upside of 15.60%. Given Lockheed Martin’s stronger consensus rating and higher possible upside, analysts clearly believe Lockheed Martin is more favorable than MTU Aero Engines.
Profitability
This table compares MTU Aero Engines and Lockheed Martin’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| MTU Aero Engines | 11.28% | 24.07% | 8.14% |
| Lockheed Martin | 6.38% | 101.64% | 10.98% |
Summary
Lockheed Martin beats MTU Aero Engines on 13 of the 17 factors compared between the two stocks.
About MTU Aero Engines
MTU Aero Engines AG, together with its subsidiaries, engages in the development, manufacture, marketing, and maintenance of commercial and military aircraft engines, and aero-derivative industrial gas turbines in Germany, other European countries, North America, Asia, and internationally. It operates through two segments: Original Equipment Manufacturing (OEM Business); and Maintenance, Repair, and Overhaul (MRO Business). The company offers commercial aircraft engines for wide body jets, narrow body and regional jets, business jets, and turboprops; military aircraft engines for fighter jets, helicopters, and transporters; and industrial gas turbines. It also maintains, repairs, and overhauls commercial and military engines; and manufactures and markets various spare parts. The company was formerly known as MTU Aero Engines Holding AG and changed its name to MTU Aero Engines AG in May 2013. MTU Aero Engines AG was founded in 1913 and is headquartered in Munich, Germany.
About Lockheed Martin
Lockheed Martin Corporation, a security and aerospace company, engages in the research, design, development, manufacture, integration, and sustainment of technology systems, products, and services worldwide. The company operates through Aeronautics, Missiles and Fire Control, Rotary and Mission Systems, and Space segments. The Aeronautics segment offers combat and air mobility aircraft, unmanned air vehicles, and related technologies. The Missiles and Fire Control segment provides air and missile defense systems; tactical missiles and air-to-ground precision strike weapon systems; logistics; fire control systems; mission operations support, readiness, engineering support, and integration services; manned and unmanned ground vehicles; and energy management solutions. The Rotary and Mission Systems segment offers military and commercial helicopters, surface ships, sea and land-based missile defense systems, radar systems, sea and air-based mission and combat systems, command and control mission solutions, cyber solutions, and simulation and training solutions. The Space segment offers satellites; space transportation systems; strategic, advanced strike, and defensive systems; and classified systems and services in support of national security systems. This segment also provides network-enabled situational awareness and integrates space and ground global systems to help its customers gather, analyze, and securely distribute critical intelligence data. It serves primarily serves the U.S. government, as well as foreign military sales contracted through the U.S. government. The company was founded in 1912 and is based in Bethesda, Maryland.
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