Reviewing Embraer-Empresa Brasileira de Aeronautica (NYSE:EMBJ) and FTAI Aviation (NASDAQ:FTAI)

Embraer-Empresa Brasileira de Aeronautica (NYSE:EMBJ) and FTAI Aviation (NASDAQ:FTAI) are both large-cap industrials companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, risk, analyst recommendations, earnings, dividends, profitability and institutional ownership.

Risk & Volatility

Embraer-Empresa Brasileira de Aeronautica has a beta of 1.4, meaning that its share price is 40% more volatile than the S&P 500. Comparatively, FTAI Aviation has a beta of 1.51, meaning that its share price is 51% more volatile than the S&P 500.

Profitability

This table compares Embraer-Empresa Brasileira de Aeronautica and FTAI Aviation’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%
FTAI Aviation	15.94%	139.59%	11.26%

Dividends

Embraer-Empresa Brasileira de Aeronautica pays an annual dividend of $0.50 per share and has a dividend yield of 0.7%. FTAI Aviation pays an annual dividend of $2.00 per share and has a dividend yield of 1.3%. Embraer-Empresa Brasileira de Aeronautica pays out 20.2% of its earnings in the form of a dividend. FTAI Aviation pays out 43.5% 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.

Valuation and Earnings

This table compares Embraer-Empresa Brasileira de Aeronautica and FTAI Aviation”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Embraer-Empresa Brasileira de Aeronautica	$7.58 billion	1.70	$351.90 million	$2.47	28.83
FTAI Aviation	$2.51 billion	6.46	$501.06 million	$4.60	34.26

FTAI Aviation has lower revenue, but higher earnings than Embraer-Empresa Brasileira de Aeronautica. Embraer-Empresa Brasileira de Aeronautica is trading at a lower price-to-earnings ratio than FTAI Aviation, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings for Embraer-Empresa Brasileira de Aeronautica and FTAI Aviation, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Embraer-Empresa Brasileira de Aeronautica	0	0	3	1	3.25
FTAI Aviation	0	2	8	0	2.80

Embraer-Empresa Brasileira de Aeronautica currently has a consensus price target of $92.50, indicating a potential upside of 29.90%. FTAI Aviation has a consensus price target of $310.62, indicating a potential upside of 97.11%. Given FTAI Aviation’s higher possible upside, analysts clearly believe FTAI Aviation is more favorable than Embraer-Empresa Brasileira de Aeronautica.

Institutional & Insider Ownership

34.6% of Embraer-Empresa Brasileira de Aeronautica shares are owned by institutional investors. Comparatively, 89.0% of FTAI Aviation shares are owned by institutional investors. 1.0% of Embraer-Empresa Brasileira de Aeronautica shares are owned by insiders. Comparatively, 1.4% of FTAI Aviation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

FTAI Aviation beats Embraer-Empresa Brasileira de Aeronautica on 13 of the 17 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 FTAI Aviation

FTAI Aviation Ltd. owns and acquires aviation and offshore energy equipment for the transportation of goods and people worldwide. It operates through two segments, Aviation Leasing and Aerospace Products. The Aviation Leasing segment owns and manages aviation assets, including aircraft and aircraft engines, which it leases and sells to customers. As of December 31, 2023, this segment owned and managed 363 aviation assets consisting of 96 commercial aircraft and 267 engines, including eight aircraft and seventeen engines that were located in Russia. The Aerospace Products segment develops, manufactures, repairs, and sells aircraft engines and aftermarket components for aircraft engines. The company was founded in 2011 and is headquartered in New York, New York.