Critical Comparison: MTU Aero Engines (OTCMKTS:MTUAY) & TAT Technologies (NASDAQ:TATT)

MTU Aero Engines (OTCMKTS:MTUAY) and TAT Technologies (NASDAQ:TATT) are both industrials companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, earnings, valuation and risk.

Volatility & Risk

MTU Aero Engines has a beta of 1.03, suggesting that its share price is 3% more volatile than the S&P 500. Comparatively, TAT Technologies has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500.

Earnings & Valuation

This table compares MTU Aero Engines and TAT Technologies”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MTU Aero Engines	$9.91 billion	2.17	$1.15 billion	$10.21	19.51
TAT Technologies	$178.01 million	2.35	$16.82 million	$1.60	20.13

MTU Aero Engines has higher revenue and earnings than TAT Technologies. MTU Aero Engines is trading at a lower price-to-earnings ratio than TAT Technologies, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings for MTU Aero Engines and TAT Technologies, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MTU Aero Engines	2	3	4	1	2.40
TAT Technologies	0	2	5	2	3.00

TAT Technologies has a consensus target price of $59.17, suggesting a potential upside of 83.69%. Given TAT Technologies’ stronger consensus rating and higher possible upside, analysts clearly believe TAT Technologies is more favorable than MTU Aero Engines.

Institutional & Insider Ownership

0.0% of MTU Aero Engines shares are held by institutional investors. Comparatively, 15.1% of TAT Technologies shares are held by institutional investors. 8.7% of TAT Technologies shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares MTU Aero Engines and TAT Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MTU Aero Engines	10.43%	22.42%	7.72%
TAT Technologies	11.26%	9.84%	7.58%

Summary

TAT Technologies beats MTU Aero Engines on 9 of the 15 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 TAT Technologies

TAT Technologies Ltd., together with its subsidiaries, provides solutions and services to the commercial and military aerospace, and ground defense industries in the United States, Israel, and internationally. The company operates through four segments: Original Equipment Manufacturing (OEM) of Heat Transfer Solutions and Aviation Accessories; Maintenance, Repair, and Overhaul (MRO) Services for Heat Transfer Components and OEM of Heat Transfer Solutions; MRO Services for Aviation Components; and Overhaul and Coating of Jet Engine Components. It designs, develops, and manufactures a range of heat transfer solutions, such as pre-cooler and oil/fuel hydraulic heat exchangers used in mechanical and electronic systems in commercial, military, and business aircraft; environmental control and power electronics cooling systems for use in aircraft and ground applications; and a range of other mechanical aircraft accessories and systems, such as pumps, valves, and turbine power units. The company provides MRO services for heat transfer components, as well as for manufacturing heat transfer solutions; and aviation components. In addition, it engages in the operation of a repair station, which provides heat transfer MRO services for airlines, air cargo carriers, maintenance service centers, and the military; and the overhaul and coating of jet engine components, including turbine vanes and blades, fan blades, variable inlet guide vanes, and afterburner flaps. The company was formerly known as Galagraph Ltd. and changed its name to TAT Technologies Ltd. in May 1992. TAT Technologies Ltd. was founded in 1969 and is headquartered in Netanya, Israel.