Virgin Galactic (NYSE:SPCE) vs. Embraer-Empresa Brasileira de Aeronautica (NYSE:ERJ) Head-To-Head Comparison

Virgin Galactic (NYSE:SPCE) and Embraer-Empresa Brasileira de Aeronautica (NYSE:ERJ) are both aerospace companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, dividends, earnings, risk, analyst recommendations, valuation and institutional ownership.

Analyst Ratings

This is a summary of current recommendations and price targets for Virgin Galactic and Embraer-Empresa Brasileira de Aeronautica, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Virgin Galactic	0	2	1	0	2.33
Embraer-Empresa Brasileira de Aeronautica	1	1	4	2	2.88

Virgin Galactic currently has a consensus price target of $4.75, indicating a potential upside of 40.32%. Embraer-Empresa Brasileira de Aeronautica has a consensus price target of $59.40, indicating a potential downside of 1.36%. Given Virgin Galactic’s higher probable upside, analysts plainly believe Virgin Galactic is more favorable than Embraer-Empresa Brasileira de Aeronautica.

Institutional and Insider Ownership

46.6% of Virgin Galactic shares are owned by institutional investors. Comparatively, 34.7% of Embraer-Empresa Brasileira de Aeronautica shares are owned by institutional investors. 0.4% of Virgin Galactic shares are owned by company insiders. Comparatively, 1.0% of Embraer-Empresa Brasileira de Aeronautica shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Virgin Galactic	-17,828.03%	-98.94%	-32.03%
Embraer-Empresa Brasileira de Aeronautica	5.43%	13.38%	3.92%

Risk & Volatility

Virgin Galactic has a beta of 2.13, suggesting that its stock price is 113% more volatile than the S&P 500. Comparatively, Embraer-Empresa Brasileira de Aeronautica has a beta of 1.87, suggesting that its stock price is 87% more volatile than the S&P 500.

Valuation and Earnings

This table compares Virgin Galactic and Embraer-Empresa Brasileira de Aeronautica”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Virgin Galactic	$7.04 million	27.69	-$346.74 million	($9.04)	-0.37
Embraer-Empresa Brasileira de Aeronautica	$6.39 billion	1.73	$352.50 million	$2.05	29.38

Embraer-Empresa Brasileira de Aeronautica has higher revenue and earnings than Virgin Galactic. Virgin Galactic 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.

Summary

Embraer-Empresa Brasileira de Aeronautica beats Virgin Galactic on 11 of the 15 factors compared between the two stocks.

About Virgin Galactic

Virgin Galactic Holdings, Inc., an aerospace and space travel company, focuses on the development, manufacture, and operation of spaceships and related technologies. The company engages in the design and development, manufacturing, ground and flight testing, spaceflight operation, and post-flight maintenance of spaceflight systems for private individuals, researchers, and government agencies. Virgin Galactic Holdings, Inc. is headquartered in Tustin, California.

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.