Mesa Air Group (NASDAQ:MESA) and American Airlines Group (NASDAQ:AAL) are both transportation companies, but which is the better business? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, profitability, institutional ownership, valuation and earnings.
Insider and Institutional Ownership
61.6% of Mesa Air Group shares are owned by institutional investors. Comparatively, 44.4% of American Airlines Group shares are owned by institutional investors. 4.4% of Mesa Air Group shares are owned by company insiders. Comparatively, 1.0% of American Airlines Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Analyst Recommendations
This is a breakdown of current recommendations for Mesa Air Group and American Airlines Group, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Mesa Air Group | 0 | 2 | 2 | 0 | 2.50 |
| American Airlines Group | 8 | 7 | 1 | 0 | 1.56 |
Mesa Air Group presently has a consensus price target of $12.00, suggesting a potential downside of 0.66%. American Airlines Group has a consensus price target of $15.5714, suggesting a potential downside of 29.57%. Given Mesa Air Group's stronger consensus rating and higher probable upside, research analysts clearly believe Mesa Air Group is more favorable than American Airlines Group.
Risk and Volatility
Mesa Air Group has a beta of 3.12, meaning that its stock price is 212% more volatile than the S&P 500. Comparatively, American Airlines Group has a beta of 1.82, meaning that its stock price is 82% more volatile than the S&P 500.
Earnings and Valuation
This table compares Mesa Air Group and American Airlines Group's revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Mesa Air Group | $545.07 million | 0.79 | $27.46 million | $0.78 | 15.47 |
| American Airlines Group | $45.77 billion | 0.31 | $1.69 billion | $4.90 | 4.48 |
American Airlines Group has higher revenue and earnings than Mesa Air Group. American Airlines Group is trading at a lower price-to-earnings ratio than Mesa Air Group, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Mesa Air Group and American Airlines Group's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Mesa Air Group | 5.04% | 6.16% | 1.82% |
| American Airlines Group | -25.56% | N/A | -11.06% |
Summary
Mesa Air Group beats American Airlines Group on 11 of the 14 factors compared between the two stocks.
