Head to Head Survey: Embraer-Empresa Brasileira de Aeronautica (NYSE:EMBJ) and Transdigm Group (NYSE:TDG)

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

Analyst Ratings

This is a breakdown of recent ratings and price targets for Transdigm Group and Embraer-Empresa Brasileira de Aeronautica, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Transdigm Group	0	13	5	0	2.28
Embraer-Empresa Brasileira de Aeronautica	0	0	3	1	3.25

Transdigm Group currently has a consensus price target of $1,428.40, suggesting a potential upside of 18.44%. Embraer-Empresa Brasileira de Aeronautica has a consensus price target of $92.50, suggesting a potential upside of 22.52%. Given Embraer-Empresa Brasileira de Aeronautica’s stronger consensus rating and higher possible upside, analysts plainly believe Embraer-Empresa Brasileira de Aeronautica is more favorable than Transdigm Group.

Risk and Volatility

Transdigm Group has a beta of 0.98, suggesting that its stock price is 2% less volatile than the S&P 500. Comparatively, Embraer-Empresa Brasileira de Aeronautica has a beta of 1.5, suggesting that its stock price is 50% more volatile than the S&P 500.

Valuation and Earnings

This table compares Transdigm Group and Embraer-Empresa Brasileira de Aeronautica”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Transdigm Group	$8.83 billion	7.64	$2.07 billion	$32.96	36.59
Embraer-Empresa Brasileira de Aeronautica	$7.58 billion	1.80	$351.90 million	$2.47	30.57

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

Profitability

This table compares Transdigm Group and Embraer-Empresa Brasileira de Aeronautica’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Transdigm Group	19.69%	-23.65%	9.12%
Embraer-Empresa Brasileira de Aeronautica	5.35%	11.90%	3.51%

Insider & Institutional Ownership

95.8% of Transdigm Group shares are held by institutional investors. Comparatively, 34.6% of Embraer-Empresa Brasileira de Aeronautica shares are held by institutional investors. 3.2% of Transdigm Group shares are held by company insiders. Comparatively, 1.0% of Embraer-Empresa Brasileira de Aeronautica shares are held by company 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

Transdigm Group beats Embraer-Empresa Brasileira de Aeronautica on 10 of the 15 factors compared between the two stocks.

About Transdigm Group

TransDigm Group Incorporated designs, produces, and supplies aircraft components in the United States and internationally. The Power & Control segment offers mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, specialized pumps and valves, power conditioning devices, specialized AC/DC electric motors and generators, batteries and chargers, databus and power controls, sensor products, switches and relay panels, hoists, winches and lifting devices, and cargo loading and handling systems. This segment serves engine and power system and subsystem suppliers, airlines, third party maintenance suppliers, military buying agencies, and repair depots. The Airframe segment provides engineered latching and locking devices, engineered rods, engineered connectors and elastomer sealing solutions, cockpit security components and systems, cockpit displays, engineered audio, radio and antenna systems, lavatory components, seat belts and safety restraints, engineered and customized interior surfaces and related components, thermal protection and insulation products, lighting and control technology, and parachutes. This segment serves airframe manufacturers, cabin system and subsystem suppliers, airlines, third party maintenance suppliers, military buying agencies, and repair depots. The Non-aviation segment offers seat belts and safety restraints for ground transportation applications; electro-mechanical actuators for space applications; hydraulic/electromechanical actuators and fuel valves for land-based gas turbines; refueling systems for heavy equipment used in mining, construction, and other industries; and turbine controls for the energy and oil and gas markets. This segment serves off-road vehicle and subsystem suppliers, child restraint system suppliers, and satellite and space system suppliers; and manufacturers of heavy equipment. TransDigm Group Incorporated was founded in 1993 and is based in Cleveland, Ohio.

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.