Alaska Air Group (NYSE:ALK) and China Southern Airlines (NYSE:ZNH) are both mid-cap transportation companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, profitability, dividends, institutional ownership, risk and earnings.
Risk and Volatility
Alaska Air Group has a beta of 1.81, indicating that its stock price is 81% more volatile than the S&P 500. Comparatively, China Southern Airlines has a beta of 1.66, indicating that its stock price is 66% more volatile than the S&P 500.
Profitability
This table compares Alaska Air Group and China Southern Airlines' 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% |
| China Southern Airlines | -6.01% | -9.29% | -2.35% |
Insider & Institutional Ownership
73.1% of Alaska Air Group shares are held by institutional investors. Comparatively, 0.3% of China Southern Airlines shares are held by institutional investors. 0.5% of Alaska Air Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Earnings and Valuation
This table compares Alaska Air Group and China Southern Airlines' top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Alaska Air Group | $8.78 billion | 0.98 | $769 million | $6.42 | 10.80 |
| China Southern Airlines | $22.33 billion | 0.40 | $382.01 million | $1.45 | 24.83 |
Alaska Air Group has higher earnings, but lower revenue than China Southern Airlines. Alaska Air Group is trading at a lower price-to-earnings ratio than China Southern 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 Alaska Air Group and China Southern Airlines, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Alaska Air Group | 0 | 1 | 12 | 1 | 3.00 |
| China Southern Airlines | 0 | 1 | 5 | 0 | 2.83 |
Alaska Air Group presently has a consensus target price of $67.7692, suggesting a potential downside of 2.25%. Given Alaska Air Group's stronger consensus rating and higher probable upside, research analysts clearly believe Alaska Air Group is more favorable than China Southern Airlines.
Summary
Alaska Air Group beats China Southern Airlines on 10 of the 15 factors compared between the two stocks.
