Critical Survey: MTU Aero Engines (OTCMKTS:MTUAY) vs. FTAI Aviation (NASDAQ:FTAI)

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

Analyst Ratings

This is a breakdown of current ratings and price targets for FTAI Aviation and MTU Aero Engines, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FTAI Aviation	0	2	8	0	2.80
MTU Aero Engines	2	3	4	1	2.40

FTAI Aviation presently has a consensus price target of $310.62, suggesting a potential upside of 96.66%. Given FTAI Aviation’s stronger consensus rating and higher possible upside, analysts clearly believe FTAI Aviation is more favorable than MTU Aero Engines.

Valuation and Earnings

This table compares FTAI Aviation and MTU Aero Engines”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FTAI Aviation	$3.11 billion	5.21	$501.06 million	$4.60	34.34
MTU Aero Engines	$9.91 billion	2.13	$1.15 billion	$10.21	19.21

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
FTAI Aviation	15.94%	139.59%	11.26%
MTU Aero Engines	10.43%	22.42%	7.72%

Risk & Volatility

FTAI Aviation has a beta of 1.51, meaning that its stock price is 51% more volatile than the S&P 500. Comparatively, MTU Aero Engines has a beta of 1.03, meaning that its stock price is 3% more volatile than the S&P 500.

Institutional & Insider Ownership

89.0% of FTAI Aviation shares are owned by institutional investors. Comparatively, 0.0% of MTU Aero Engines shares are owned by institutional investors. 1.4% of FTAI Aviation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

FTAI Aviation pays an annual dividend of $2.00 per share and has a dividend yield of 1.3%. MTU Aero Engines pays an annual dividend of $1.49 per share and has a dividend yield of 0.8%. FTAI Aviation pays out 43.5% of its earnings in the form of a dividend. MTU Aero Engines pays out 14.6% 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

FTAI Aviation beats MTU Aero Engines on 12 of the 17 factors compared between the two stocks.

About FTAI Aviation

FTAI Aviation Ltd. owns and acquires aviation and offshore energy equipment for the transportation of goods and people worldwide. It operates through two segments, Aviation Leasing and Aerospace Products. The Aviation Leasing segment owns and manages aviation assets, including aircraft and aircraft engines, which it leases and sells to customers. As of December 31, 2023, this segment owned and managed 363 aviation assets consisting of 96 commercial aircraft and 267 engines, including eight aircraft and seventeen engines that were located in Russia. The Aerospace Products segment develops, manufactures, repairs, and sells aircraft engines and aftermarket components for aircraft engines. The company was founded in 2011 and is headquartered in New York, New York.

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.