Head to Head Contrast: Lockheed Martin (NYSE:LMT) & MTU Aero Engines (OTCMKTS:MTUAY)

Lockheed Martin (NYSE:LMT) and MTU Aero Engines (OTCMKTS:MTUAY) are both large-cap aerospace companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, valuation, analyst recommendations, institutional ownership, risk, profitability and earnings.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Lockheed Martin	6.38%	101.64%	10.98%
MTU Aero Engines	11.28%	24.07%	8.14%

Volatility and Risk

Lockheed Martin has a beta of 0.1, indicating that its stock price is 90% less volatile than the S&P 500. Comparatively, MTU Aero Engines has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500.

Valuation & Earnings

This table compares Lockheed Martin and MTU Aero Engines”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lockheed Martin	$75.05 billion	1.61	$5.02 billion	$20.65	25.31
MTU Aero Engines	$9.91 billion	1.84	$1.15 billion	$10.69	15.80

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

Institutional & Insider Ownership

74.2% of Lockheed Martin shares are held by institutional investors. Comparatively, 0.0% of MTU Aero Engines shares are held by institutional investors. 0.1% of Lockheed Martin shares are held 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

Lockheed Martin pays an annual dividend of $13.80 per share and has a dividend yield of 2.6%. MTU Aero Engines pays an annual dividend of $1.49 per share and has a dividend yield of 0.9%. Lockheed Martin pays out 66.8% of its earnings in the form of a dividend. MTU Aero Engines pays out 13.9% 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. Lockheed Martin has increased its dividend for 22 consecutive years. Lockheed Martin is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of current ratings for Lockheed Martin and MTU Aero Engines, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lockheed Martin	1	12	7	1	2.38
MTU Aero Engines	2	4	3	1	2.30

Lockheed Martin currently has a consensus price target of $620.68, indicating a potential upside of 18.75%. Given Lockheed Martin’s stronger consensus rating and higher possible upside, equities analysts plainly believe Lockheed Martin is more favorable than MTU Aero Engines.

Summary

Lockheed Martin beats MTU Aero Engines on 13 of the 17 factors compared between the two stocks.

About Lockheed Martin

Lockheed Martin Corporation, a security and aerospace company, engages in the research, design, development, manufacture, integration, and sustainment of technology systems, products, and services worldwide. The company operates through Aeronautics, Missiles and Fire Control, Rotary and Mission Systems, and Space segments. The Aeronautics segment offers combat and air mobility aircraft, unmanned air vehicles, and related technologies. The Missiles and Fire Control segment provides air and missile defense systems; tactical missiles and air-to-ground precision strike weapon systems; logistics; fire control systems; mission operations support, readiness, engineering support, and integration services; manned and unmanned ground vehicles; and energy management solutions. The Rotary and Mission Systems segment offers military and commercial helicopters, surface ships, sea and land-based missile defense systems, radar systems, sea and air-based mission and combat systems, command and control mission solutions, cyber solutions, and simulation and training solutions. The Space segment offers satellites; space transportation systems; strategic, advanced strike, and defensive systems; and classified systems and services in support of national security systems. This segment also provides network-enabled situational awareness and integrates space and ground global systems to help its customers gather, analyze, and securely distribute critical intelligence data. It serves primarily serves the U.S. government, as well as foreign military sales contracted through the U.S. government. The company was founded in 1912 and is based in Bethesda, Maryland.

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.