MTU Aero Engines (OTCMKTS:MTUAY) & Rocket Lab (NASDAQ:RKLB) Critical Analysis

Rocket Lab (NASDAQ:RKLB) and MTU Aero Engines (OTCMKTS:MTUAY) are both large-cap industrials companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, risk, institutional ownership, profitability, analyst recommendations and valuation.

Volatility and Risk

Rocket Lab has a beta of 2.6, suggesting that its stock price is 160% more volatile than the S&P 500. Comparatively, MTU Aero Engines has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500.

Valuation & Earnings

This table compares Rocket Lab and MTU Aero Engines”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rocket Lab	$601.80 million	72.15	-$198.21 million	($0.27)	-268.78
MTU Aero Engines	$9.91 billion	2.23	$1.15 billion	$10.21	20.13

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Rocket Lab	-21.51%	-6.48%	-4.92%
MTU Aero Engines	10.43%	23.33%	8.02%

Analyst Ratings

This is a summary of current ratings and price targets for Rocket Lab and MTU Aero Engines, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rocket Lab	1	5	13	3	2.82
MTU Aero Engines	3	4	3	1	2.18

Rocket Lab presently has a consensus target price of $110.65, suggesting a potential upside of 52.47%. Given Rocket Lab’s stronger consensus rating and higher possible upside, analysts plainly believe Rocket Lab is more favorable than MTU Aero Engines.

Insider and Institutional Ownership

71.8% of Rocket Lab shares are held by institutional investors. Comparatively, 0.0% of MTU Aero Engines shares are held by institutional investors. 8.4% of Rocket Lab shares are held 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.

Summary

Rocket Lab beats MTU Aero Engines on 8 of the 15 factors compared between the two stocks.

About Rocket Lab

Rocket Lab USA, Inc., a space company, provides launch services and space systems solutions for the space and defense industries. The company provides launch services, spacecraft design services, spacecraft components, spacecraft manufacturing, and other spacecraft and on-orbit management solutions; and constellation management services, as well as designs and manufactures small and medium-class rockets. It also designs, manufactures, and sells Electron, a reusable orbital-class small rocket; and the Photon satellite platforms, as well as developing the Neutron 8-ton payload class launch vehicle; conducts remote launch activities; and designs and manufactures a range of components and subsystems for the Photon family of spacecraft and broader merchant spacecraft components. The company serves commercial, aerospace prime contractors, and government customers. Rocket Lab USA, Inc. was founded in 2006 and is headquartered in Long Beach, California.

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.