American Airlines Group (NASDAQ:AAL) and United Airlines (NASDAQ:UAL) are both large-cap transportation companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, analyst recommendations, institutional ownership, risk, earnings, valuation and dividends.
Earnings and Valuation
This table compares American Airlines Group and United Airlines' revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| American Airlines Group | $45.77 billion | 0.31 | $1.69 billion | $4.90 | 4.50 |
| United Airlines | $43.26 billion | 0.42 | $3.01 billion | $12.05 | 4.64 |
United Airlines has lower revenue, but higher earnings than American Airlines Group. American Airlines Group is trading at a lower price-to-earnings ratio than United Airlines, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of current recommendations and price targets for American Airlines Group and United Airlines, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| American Airlines Group | 8 | 7 | 1 | 0 | 1.56 |
| United Airlines | 5 | 5 | 8 | 0 | 2.17 |
American Airlines Group presently has a consensus price target of $15.5714, suggesting a potential downside of 29.32%. United Airlines has a consensus price target of $53.8947, suggesting a potential downside of 3.54%. Given United Airlines' stronger consensus rating and higher probable upside, analysts clearly believe United Airlines is more favorable than American Airlines Group.
Risk and Volatility
American Airlines Group has a beta of 1.82, indicating that its stock price is 82% more volatile than the S&P 500. Comparatively, United Airlines has a beta of 1.63, indicating that its stock price is 63% more volatile than the S&P 500.
Insider & Institutional Ownership
44.4% of American Airlines Group shares are held by institutional investors. Comparatively, 60.9% of United Airlines shares are held by institutional investors. 1.0% of American Airlines Group shares are held by insiders. Comparatively, 0.4% of United Airlines shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Profitability
This table compares American Airlines Group and United Airlines' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| American Airlines Group | -25.56% | N/A | -11.06% |
| United Airlines | -19.85% | -54.29% | -8.93% |
Summary
United Airlines beats American Airlines Group on 9 of the 14 factors compared between the two stocks.
