Embraer-Empresa Brasileira de Aeronautica (NYSE:EMBJ – Get Free Report) and CAE (NYSE:CAE – Get Free Report) are both industrials companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, valuation, analyst recommendations, earnings, institutional ownership, risk and dividends.
Insider and Institutional Ownership
34.6% of Embraer-Empresa Brasileira de Aeronautica shares are owned by institutional investors. Comparatively, 67.4% of CAE shares are owned by institutional investors. 1.0% of Embraer-Empresa Brasileira de Aeronautica shares are owned by insiders. Comparatively, 18.3% of CAE shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Analyst Ratings
This is a breakdown of recent recommendations and price targets for Embraer-Empresa Brasileira de Aeronautica and CAE, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Embraer-Empresa Brasileira de Aeronautica | 0 | 2 | 4 | 0 | 2.67 |
| CAE | 1 | 4 | 5 | 0 | 2.40 |
Valuation & Earnings
This table compares Embraer-Empresa Brasileira de Aeronautica and CAE”s 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 | 1.76 | $351.90 million | $2.47 | 29.82 |
| CAE | $4.99 billion | 1.57 | $226.62 million | $0.65 | 37.55 |
Embraer-Empresa Brasileira de Aeronautica has higher revenue and earnings than CAE. Embraer-Empresa Brasileira de Aeronautica is trading at a lower price-to-earnings ratio than CAE, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Embraer-Empresa Brasileira de Aeronautica and CAE’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% |
| CAE | 6.36% | 7.45% | 3.51% |
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, CAE has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500.
Dividends
Embraer-Empresa Brasileira de Aeronautica pays an annual dividend of $0.47 per share and has a dividend yield of 0.6%. CAE pays an annual dividend of $0.33 per share and has a dividend yield of 1.3%. Embraer-Empresa Brasileira de Aeronautica pays out 19.0% of its earnings in the form of a dividend. CAE pays out 50.6% 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.
Summary
Embraer-Empresa Brasileira de Aeronautica beats CAE on 8 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 CAE
CAE Inc., together with its subsidiaries, provides simulation training and critical operations support solutions in Canada, the United States, the United Kingdom, Europe, Asia, the Oceania, Africa, and Rest of the Americas. It operates through two segments, Civil Aviation; and Defense and Security. The Civil Aviation segment offers training solutions for flight, cabin, maintenance, and ground personnel in commercial, business, and helicopter aviation; a range of flight simulation training devices; and ab initio pilot training and crew sourcing services, as well as aircraft flight operations solutions. The Defense and Security segment operates as a training and simulation provider that delivers platform-independent solutions to enable and enhance force readiness and security for defense forces, original equipment manufacturers (OEMs), government agencies, and public safety organizations. The company was formerly known as CAE Industries Ltd. and changed its name to CAE Inc. in 1993. CAE Inc. was incorporated in 1947 and is headquartered in Saint-Laurent, Canada.
Receive News & Ratings for Embraer-Empresa Brasileira de Aeronautica Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Embraer-Empresa Brasileira de Aeronautica and related companies with MarketBeat.com's FREE daily email newsletter.
