Royal Mail plc (RMG.L) (LON:RMG) and International Consolidated Airlines Group, S.A. (IAG.L) (LON:IAG) are both mid-cap services companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, dividends, earnings, profitability and institutional ownership.
Dividends
Royal Mail plc (RMG.L) pays an annual dividend of GBX 0.08 per share and has a dividend yield of 0.0%. International Consolidated Airlines Group, S.A. (IAG.L) pays an annual dividend of GBX 0.15 per share and has a dividend yield of 0.1%. Royal Mail plc (RMG.L) pays out 3.4% of its earnings in the form of a dividend. International Consolidated Airlines Group, S.A. (IAG.L) pays out 0.1% 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. International Consolidated Airlines Group, S.A. (IAG.L) is clearly the better dividend stock, given its higher yield and lower payout ratio.
Profitability
This table compares Royal Mail plc (RMG.L) and International Consolidated Airlines Group, S.A. (IAG.L)'s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Royal Mail plc (RMG.L) | N/A | N/A | N/A |
International Consolidated Airlines Group, S.A. (IAG.L) | N/A | N/A | N/A |
Earnings and Valuation
This table compares Royal Mail plc (RMG.L) and International Consolidated Airlines Group, S.A. (IAG.L)'s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Royal Mail plc (RMG.L) | £11.35 billion | 0.40 | N/A | GBX 2.20 | 207.05 |
International Consolidated Airlines Group, S.A. (IAG.L) | N/A | N/A | N/A | GBX 160.10 | 1.26 |
International Consolidated Airlines Group, S.A. (IAG.L) is trading at a lower price-to-earnings ratio than Royal Mail plc (RMG.L), indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of current ratings and target prices for Royal Mail plc (RMG.L) and International Consolidated Airlines Group, S.A. (IAG.L), as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Royal Mail plc (RMG.L) | 3 | 4 | 5 | 0 | 2.17 |
International Consolidated Airlines Group, S.A. (IAG.L) | 0 | 6 | 11 | 0 | 2.65 |
Royal Mail plc (RMG.L) currently has a consensus price target of GBX 317, indicating a potential downside of 30.41%. International Consolidated Airlines Group, S.A. (IAG.L) has a consensus price target of GBX 227.38, indicating a potential upside of 12.51%. Given International Consolidated Airlines Group, S.A. (IAG.L)'s stronger consensus rating and higher probable upside, analysts plainly believe International Consolidated Airlines Group, S.A. (IAG.L) is more favorable than Royal Mail plc (RMG.L).
Summary
International Consolidated Airlines Group, S.A. (IAG.L) beats Royal Mail plc (RMG.L) on 6 of the 8 factors compared between the two stocks.