RTX (NYSE:RTX) & MTU Aero Engines (OTCMKTS:MTUAY) Financial Survey

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

Analyst Recommendations

This is a breakdown of current ratings for MTU Aero Engines and RTX, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MTU Aero Engines	1	4	2	1	2.38
RTX	1	5	14	1	2.71

RTX has a consensus target price of $202.00, indicating a potential downside of 1.99%. Given RTX’s stronger consensus rating and higher probable upside, analysts plainly believe RTX is more favorable than MTU Aero Engines.

Dividends

MTU Aero Engines pays an annual dividend of $0.83 per share and has a dividend yield of 0.4%. RTX pays an annual dividend of $2.72 per share and has a dividend yield of 1.3%. MTU Aero Engines pays out 7.7% of its earnings in the form of a dividend. RTX pays out 54.8% 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. RTX has increased its dividend for 5 consecutive years. RTX is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
MTU Aero Engines	11.74%	24.66%	8.18%
RTX	7.60%	13.08%	5.08%

Valuation & Earnings

This table compares MTU Aero Engines and RTX”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MTU Aero Engines	$9.91 billion	2.10	$1.16 billion	$10.71	18.08
RTX	$88.60 billion	3.13	$6.73 billion	$4.96	41.55

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

Institutional and Insider Ownership

0.0% of MTU Aero Engines shares are owned by institutional investors. Comparatively, 86.5% of RTX shares are owned by institutional investors. 0.1% of RTX shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility & Risk

MTU Aero Engines has a beta of 1.09, meaning that its stock price is 9% more volatile than the S&P 500. Comparatively, RTX has a beta of 0.42, meaning that its stock price is 58% less volatile than the S&P 500.

Summary

RTX beats MTU Aero Engines on 11 of the 17 factors compared between the two stocks.

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.

About RTX

RTX Corporation, an aerospace and defense company, provides systems and services for the commercial, military, and government customers in the United States and internationally. It operates through three segments: Collins Aerospace, Pratt & Whitney, and Raytheon. The Collins Aerospace Systems segment offers aerospace and defense products, and aftermarket service solutions for civil and military aircraft manufacturers and commercial airlines, as well as regional, business, and general aviation, defense, and commercial space operations. This segment also designs, produces, and supports cabin interior, including oxygen systems, food and beverage preparation, storage and galley systems, and lavatory and wastewater management systems; battlespace, test and training range systems, crew escape systems, and simulation and training solutions; information management services; and aftermarket services that include spare parts, overhaul and repair, engineering and technical support, training and fleet management solutions, and asset and information management services. Its Pratt & Whitney segment supplies aircraft engines for commercial, military, business jet, and general aviation customers; and produces, sells, and services military and commercial auxiliary power units. The Raytheon segment provides defensive and offensive threat detection, tracking, and mitigation capabilities for U.S., foreign government, and commercial customers. The company was formerly known as Raytheon Technologies Corporation and changed its name to RTX Corporation in July 2023. RTX Corporation was incorporated in 1934 and is headquartered in Arlington, Virginia.