American Airlines Group (NASDAQ:AAL) and Spirit Airlines (NYSE:SAVE) are both transportation companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, profitability, dividends, risk and earnings.
Volatility and Risk
American Airlines Group has a beta of 1.82, suggesting that its stock price is 82% more volatile than the S&P 500. Comparatively, Spirit Airlines has a beta of 1.59, suggesting that its stock price is 59% more volatile than the S&P 500.
Profitability
This table compares American Airlines Group and Spirit 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% |
| Spirit Airlines | -8.34% | -20.56% | -6.21% |
Analyst Ratings
This is a breakdown of current ratings and target prices for American Airlines Group and Spirit Airlines, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| American Airlines Group | 8 | 7 | 1 | 0 | 1.56 |
| Spirit Airlines | 2 | 5 | 8 | 0 | 2.40 |
American Airlines Group currently has a consensus price target of $15.5714, suggesting a potential downside of 29.32%. Spirit Airlines has a consensus price target of $36.7692, suggesting a potential downside of 0.22%. Given Spirit Airlines' stronger consensus rating and higher probable upside, analysts plainly believe Spirit Airlines is more favorable than American Airlines Group.
Insider & Institutional Ownership
44.4% of American Airlines Group shares are held by institutional investors. Comparatively, 52.2% of Spirit Airlines shares are held by institutional investors. 1.0% of American Airlines Group shares are held by insiders. Comparatively, 0.6% of Spirit Airlines shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Earnings and Valuation
This table compares American Airlines Group and Spirit 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 |
| Spirit Airlines | $3.83 billion | 0.94 | $335.26 million | $5.09 | 7.24 |
American Airlines Group has higher revenue and earnings than Spirit Airlines. American Airlines Group is trading at a lower price-to-earnings ratio than Spirit Airlines, indicating that it is currently the more affordable of the two stocks.
Summary
Spirit Airlines beats American Airlines Group on 8 of the 14 factors compared between the two stocks.
