Financial Analysis: Conrad Industries (OTCMKTS:CNRD) & Embraer-Empresa Brasileira de Aeronautica (NYSE:ERJ)

Conrad Industries (OTCMKTS:CNRD) and Embraer-Empresa Brasileira de Aeronautica (NYSE:ERJ) are both aerospace companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, risk, profitability, valuation, dividends, institutional ownership and analyst recommendations.

Volatility & Risk

Conrad Industries has a beta of 0.53, suggesting that its share price is 47% less volatile than the S&P 500. Comparatively, Embraer-Empresa Brasileira de Aeronautica has a beta of 1.72, suggesting that its share price is 72% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Conrad Industries	4.28%	16.87%	9.38%
Embraer-Empresa Brasileira de Aeronautica	6.02%	16.43%	4.76%

Valuation & Earnings

This table compares Conrad Industries and Embraer-Empresa Brasileira de Aeronautica”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Conrad Industries	$303.41 million	0.31	$11.23 million	($0.34)	-55.88
Embraer-Empresa Brasileira de Aeronautica	$6.39 billion	1.65	$352.50 million	$2.16	26.65

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

Insider & Institutional Ownership

0.6% of Conrad Industries shares are held by institutional investors. Comparatively, 34.7% of Embraer-Empresa Brasileira de Aeronautica shares are held by institutional investors. 31.5% of Conrad Industries shares are held by insiders. Comparatively, 1.0% of Embraer-Empresa Brasileira de Aeronautica shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Conrad Industries and Embraer-Empresa Brasileira de Aeronautica, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Conrad Industries	0	0	0	0	0.00
Embraer-Empresa Brasileira de Aeronautica	1	0	4	2	3.00

Embraer-Empresa Brasileira de Aeronautica has a consensus price target of $52.67, indicating a potential downside of 8.50%. 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 Conrad Industries.

Summary

Embraer-Empresa Brasileira de Aeronautica beats Conrad Industries on 12 of the 15 factors compared between the two stocks.

About Conrad Industries

Conrad Industries, Inc. engages in the construction, conversion, and repair of various steel and aluminum marine vessels in the United States. The company builds harbor tugs; specialty barges, such as crane, deck, ABS class, dry bulk cargo, aggregate, and well stim barges; inland tank, LPG inland tank, LPG pressure, LPG tank, and DS tank barges; and offshore support vessels, including liftboats, crew boats, offshore supply vessels, and offshore tugs, as well as other support equipment, such as deck and crane barges. It also builds inland pushboats comprising inland towboats, inland river push boats, and towboats; and ferries, which consist of passenger, and passenger and vehicle ferries. In addition, the company offers repairs and conversions, including electrical, mechanical, propulsion, and hull repairs to large-scale conversions of ships and barges; and engages in the fabrication of modular components for offshore floating production, storage, and offloading vessels, as well as drilling rigs. The company was founded in 1948 and is headquartered in Morgan City, Louisiana.

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.