United Continental Holdings (NYSE: UAL) and LATAM Airlines Group (NYSE:LTM) are both mid-cap transportation companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, valuation and profitability.
Valuation and Earnings
This table compares United Continental Holdings and LATAM Airlines Group’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|United Continental Holdings||$37.38 billion||0.47||$6.37 billion||$7.23||8.03|
|LATAM Airlines Group||$9.29 billion||0.91||$1.41 billion||($0.01)||-1,398.60|
United Continental Holdings has higher revenue and earnings than LATAM Airlines Group. LATAM Airlines Group is trading at a lower price-to-earnings ratio than United Continental Holdings, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
United Continental Holdings has a beta of 1.06, suggesting that its stock price is 6% more volatile than the S&P 500. Comparatively, LATAM Airlines Group has a beta of 1.59, suggesting that its stock price is 59% more volatile than the S&P 500.
Institutional and Insider Ownership
97.7% of United Continental Holdings shares are held by institutional investors. Comparatively, 3.2% of LATAM Airlines Group shares are held by institutional investors. 0.3% of United Continental Holdings shares are held by insiders. Comparatively, 7.9% of LATAM Airlines Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
This table compares United Continental Holdings and LATAM Airlines Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|United Continental Holdings||6.09%||29.46%||6.17%|
|LATAM Airlines Group||-0.14%||-0.16%||-0.03%|
This is a summary of recent ratings and recommmendations for United Continental Holdings and LATAM Airlines Group, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|United Continental Holdings||0||12||6||0||2.33|
|LATAM Airlines Group||1||5||1||0||2.00|
United Continental Holdings currently has a consensus target price of $81.59, suggesting a potential upside of 40.52%. LATAM Airlines Group has a consensus target price of $10.67, suggesting a potential downside of 23.81%. Given United Continental Holdings’ stronger consensus rating and higher probable upside, equities analysts clearly believe United Continental Holdings is more favorable than LATAM Airlines Group.
LATAM Airlines Group pays an annual dividend of $0.02 per share and has a dividend yield of 0.1%. United Continental Holdings does not pay a dividend. LATAM Airlines Group pays out -199.8% of its earnings in the form of a dividend.
United Continental Holdings beats LATAM Airlines Group on 10 of the 15 factors compared between the two stocks.
United Continental Holdings Company Profile
United Continental Holdings, Inc. (UAL) is a holding company and its principal subsidiary is United Air Lines, Inc. (United). The Company transports people and cargo through its mainline operations. It has global air rights in North America, Asia-Pacific, Europe, Middle East, Africa and Latin America. The Company, through United and its regional carriers, operates flights from its hubs at Newark Liberty International Airport (Newark Liberty), Chicago O’Hare International Airport (Chicago O’Hare), Denver International Airport (Denver), George Bush Intercontinental Airport (Houston Bush), Los Angeles International Airport (LAX), A.B. Won Pat International Airport (Guam), San Francisco International Airport (SFO) and Washington Dulles International Airport (Washington Dulles). It has contractual relationships with regional carriers to provide regional jet and turboprop service branded as United Express. These regional operations are an extension of the Company’s mainline network.
LATAM Airlines Group Company Profile
LATAM Airlines Group SA is a Chile-based company, which is engaged in passenger and cargo air transportation, both in the domestic markets of Chile, Peru, Argentina, Colombia, Ecuador and Brazil and in a developed series of regional and international routes in America, Europe and Oceania. These businesses are performed directly or through its subsidiaries in different countries. It operates through two segments: the Air transportation business and the Coalition and loyalty program Multiplus. It Air transportation segment corresponds to the route network for air transport. Its segment of Coalition and loyalty program called Multiplus is a frequent flyer programs, which operate as a unilateral system of loyalty that offers a flexible coalition system. The Company operates a fleet of over 329 aircrafts. Its passenger aircrafts include Airbus A319-100, Airbus A350-900, Boeing 767-300ER, Boeing 787-8, Boeing 787-9 and Boeing 777-300ER.
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