Embraer-Empresa Brasileira de Aeronautica (NYSE:ERJ) and GE Aerospace (NYSE:GE) are both large-cap aerospace companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, dividends, institutional ownership, risk, earnings, profitability and analyst recommendations.\n\nDividends: Embraer-Empresa Brasileira de Aeronautica pays an annual dividend of $0.04 per share and has a dividend yield of 0.1%. GE Aerospace pays an annual dividend of $1.44 per share and has a dividend yield of 0.5%. Embraer-Empresa Brasileira de Aeronautica pays out 2.0% of its earnings in the form of a dividend. GE Aerospace pays out 20.1% 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. GE Aerospace has increased its dividend for 2 consecutive years. GE Aerospace is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.\n\nRisk and Volatility: Embraer-Empresa Brasileira de Aeronautica has a beta of 1.76, indicating that its share price is 76% more volatile than the S&P 500. Comparatively, GE Aerospace has a beta of 1.44, indicating that its share price is 44% more volatile than the S&P 500.\n\nAnalyst Recommendations: This is a breakdown of current recommendations for Embraer-Empresa Brasileira de Aeronautica and GE Aerospace, as provided by MarketBeat.\n\n| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |\n|--------------|--------------|-------------|---------------------|--------------|\n| Embraer-Empresa Brasileira de Aeronautica | 1 | 0 | 4 | 2 | 3.00 |\n| GE Aerospace | 0 | 1 | 10 | 0 | 2.91 |\n\nEmbraer-Empresa Brasileira de Aeronautica currently has a consensus price target of $54.6667, suggesting a potential downside of 4.98%. GE Aerospace has a consensus price target of $232.9167, suggesting a potential downside of 12.97%. Given Embraer-Empresa Brasileira de Aeronautica’s stronger consensus rating and higher probable upside, analysts plainly believe Embraer-Empresa Brasileira de Aeronautica is more favorable than GE Aerospace.\n\nEarnings and Valuation: This table compares Embraer-Empresa Brasileira de Aeronautica and GE Aerospace’s gross revenue, earnings per share and valuation.\n\n| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |\n|---------------|-------------------|------------|--------------------|------------------------|\n| Embraer-Empresa Brasileira de Aeronautica | $6.93 billion | 1.53 | $352.50 million | $2.05 | 28.06 |\n| GE Aerospace | $41.61 billion | 6.82 | $6.56 billion | $7.17 | 37.32 |\n\nGE Aerospace 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 GE Aerospace, indicating that it is currently the more affordable of the two stocks.\n\nInstitutional and Insider Ownership: 34.7% of Embraer-Empresa Brasileira de Aeronautica shares are held by institutional investors. Comparatively, 74.8% of GE Aerospace shares are held by institutional investors. 1.0% of Embraer-Empresa Brasileira de Aeronautica shares are held by insiders. Comparatively, 0.2% of GE Aerospace shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.\n\nProfitability: This table compares Embraer-Empresa Brasileira de Aeronautica and GE Aerospace’s net margins, return on equity and return on assets.\n\n| Net Margins | Return on Equity | Return on Assets |\n|------------|------------------|-------------------|\n| Embraer-Empresa Brasileira de Aeronautica | 5.43% | 13.38% | 3.92% |\n| GE Aerospace | 18.64% | 31.32% | 4.86% |\n\nSummary: GE Aerospace beats Embraer-Empresa Brasileira de Aeronautica on 12 of the 18 factors compared between the two stocks.\n\nAbout 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.\n\nAbout GE Aerospace: GE Aerospace (also known as General Electric) is a company that specializes in providing aerospace products and services. It operates through two reportable segments: Commercial Engines and Services and Defense and Propulsion Technologies. It offers jet and turboprop engines, as well as integrated systems for commercial, military, business, and general aviation aircraft. GE demerged into GE Vernova, GE Aerospace, and GE Healthcare.

Head to Head Review: GE Aerospace (NYSE:GE) and Embraer-Empresa Brasileira de Aeronautica (NYSE:ERJ)

This article compares GE Aerospace and Embraer-Empresa Brasileira de Aeronautica (ERJ) across key financial and investment metrics including dividends, risk, analyst recommendations, earnings, valuation, and profitability. GE Aerospace outperforms Embraer in most areas, including revenue, earnings, net margins, return on equity, institutional ownership, and dividend payout ratio. However, Embraer is considered more affordable due to its lower price-to-earnings ratio and higher analyst consensus rating. The article concludes that GE Aerospace beats Embraer on 12 of 18 evaluated factors, making it the stronger investment overall.