Analyzing Airbus Group (OTCMKTS:EADSY) & General Dynamics (NYSE:GD)

General Dynamics (NYSE:GD) and Airbus Group (OTCMKTS:EADSY) are both large-cap aerospace companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, analyst recommendations, institutional ownership and earnings.

Analyst Ratings

This is a summary of recent recommendations and price targets for General Dynamics and Airbus Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
General Dynamics	1	12	9	0	2.36
Airbus Group	0	3	2	1	2.67

General Dynamics presently has a consensus target price of $315.7778, suggesting a potential downside of 1.12%. Given General Dynamics’ higher probable upside, equities research analysts plainly believe General Dynamics is more favorable than Airbus Group.

Dividends

General Dynamics pays an annual dividend of $6.00 per share and has a dividend yield of 1.9%. Airbus Group pays an annual dividend of $0.41 per share and has a dividend yield of 0.8%. General Dynamics pays out 40.3% of its earnings in the form of a dividend. Airbus Group pays out 24.3% 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. General Dynamics has increased its dividend for 34 consecutive years. General Dynamics is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares General Dynamics and Airbus Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
General Dynamics	$47.72 billion	1.80	$3.78 billion	$14.90	21.43
Airbus Group	$74.92 billion	2.23	$4.58 billion	$1.69	31.23

Airbus Group has higher revenue and earnings than General Dynamics. General Dynamics is trading at a lower price-to-earnings ratio than Airbus Group, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

General Dynamics has a beta of 0.48, suggesting that its stock price is 52% less volatile than the S&P 500. Comparatively, Airbus Group has a beta of 1.33, suggesting that its stock price is 33% more volatile than the S&P 500.

Insider and Institutional Ownership

86.1% of General Dynamics shares are held by institutional investors. Comparatively, 0.3% of Airbus Group shares are held by institutional investors. 1.5% of General Dynamics shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares General Dynamics and Airbus Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
General Dynamics	8.13%	17.99%	7.21%
Airbus Group	7.01%	24.38%	3.85%

About General Dynamics

General Dynamics Corporation operates as an aerospace and defense company worldwide. It operates through four segments: Aerospace, Marine Systems, Combat Systems, and Technologies. The Aerospace segment produces and sells business jets; and offers aircraft maintenance and repair, management, aircraft-on-ground support and completion, charter, staffing, and fixed-base operator services. The Marine Systems segment designs and builds nuclear-powered submarines, surface combatants, and auxiliary ships for the United States Navy and Jones Act ships for commercial customers, as well as builds crude oil and product tankers, and container and cargo ships; provides maintenance, modernization, and lifecycle support services for navy ships; offers and program management, planning, engineering, and design support services for submarine construction programs. The Combat Systems segment manufactures land combat solutions, such as wheeled and tracked combat vehicles, Stryker wheeled combat vehicles, piranha vehicles, weapons systems, munitions, mobile bridge systems with payloads, tactical vehicles, main battle tanks, armored vehicles, and armaments; and offers modernization programs, engineering, support, and sustainment services. The Technologies segment provides information technology solutions and mission support services; mobile communication, computers, and command-and-control mission systems; intelligence, surveillance, and reconnaissance solutions to military, intelligence, and federal civilian customers; cloud computing, artificial intelligence; machine learning; big data analytics; development, security, and operations; and unmanned undersea vehicle manufacturing and assembly services. The company was founded in 1899 and is headquartered in Reston, Virginia.

About Airbus Group

Airbus SE, together with its subsidiaries, engages in the design, manufacture, and delivery of aerospace products, services, and solutions worldwide. It operates through three segments: Airbus, Airbus Helicopters, and Airbus Defence and Space. The Airbus segment develops, manufactures, markets, and sells commercial jet passenger aircraft, freighter aircraft, regional turboprop aircraft, and aircraft components, as well as provides aircraft conversion and related services. The Airbus Helicopters segment develops, manufactures, markets, and sells civil and military helicopters; and provides helicopter-related services. The Airbus Defence and Space segment designs, develops, delivers, and supports military air systems and related services. This segment also offers civil and defence space systems for telecommunications, earth observations, navigation, and science and orbital systems; missile and space launcher systems; and services around data processing from platforms, secure communication, and cyber security. The company was formerly known as Airbus Group SE and changed its name to Airbus SE in April 2017. Airbus SE was incorporated in 1998 and is headquartered in Leiden, the Netherlands.