Alaska Air Group (NYSE:ALK) and American Airlines Group (NASDAQ:AAL) are both transportation companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, profitability, dividends, valuation, analyst recommendations, institutional ownership and risk.
Risk and Volatility
Alaska Air Group has a beta of 1.81, suggesting that its stock price is 81% more volatile than the S&P 500. Comparatively, American Airlines Group has a beta of 1.82, suggesting that its stock price is 82% more volatile than the S&P 500.
Analyst Ratings
This is a breakdown of current ratings and target prices for Alaska Air Group and American Airlines Group, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Alaska Air Group | 0 | 1 | 12 | 1 | 3.00 |
| American Airlines Group | 8 | 7 | 1 | 0 | 1.56 |
Alaska Air Group presently has a consensus price target of $62.5385, suggesting a potential downside of 10.12%. American Airlines Group has a consensus price target of $15.5714, suggesting a potential downside of 30.64%. Given Alaska Air Group's stronger consensus rating and higher possible upside, research analysts clearly believe Alaska Air Group is more favorable than American Airlines Group.
Profitability
This table compares Alaska Air Group and American Airlines Group's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Alaska Air Group | -13.96% | -19.39% | -5.51% |
| American Airlines Group | -25.56% | N/A | -11.06% |
Valuation and Earnings
This table compares Alaska Air Group and American Airlines Group's top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Alaska Air Group | $8.78 billion | 0.99 | $769 million | $6.42 | 10.90 |
| American Airlines Group | $45.77 billion | 0.31 | $1.69 billion | $4.90 | 4.59 |
American Airlines Group has higher revenue and earnings than Alaska Air Group. American Airlines Group is trading at a lower price-to-earnings ratio than Alaska Air Group, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
73.1% of Alaska Air Group shares are held by institutional investors. Comparatively, 44.4% of American Airlines Group shares are held by institutional investors. 0.5% of Alaska Air Group shares are held by company insiders. Comparatively, 1.0% of American Airlines Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Summary
Alaska Air Group beats American Airlines Group on 9 of the 15 factors compared between the two stocks.
