Head-To-Head Analysis: Alaska Air Group (ALK) vs. Azul (AZUL)

Alaska Air Group (NYSE: ALK) and Azul (NYSE:AZUL) are both mid-cap transportation companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, valuation, institutional ownership, risk and dividends.

Insider and Institutional Ownership

88.5% of Alaska Air Group shares are owned by institutional investors. Comparatively, 4.6% of Azul shares are owned by institutional investors. 0.6% of Alaska Air Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Alaska Air Group and Azul’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Alaska Air Group 10.34% 28.74% 8.75%
Azul N/A N/A N/A

Dividends

Alaska Air Group pays an annual dividend of $1.20 per share and has a dividend yield of 1.8%. Azul does not pay a dividend. Alaska Air Group pays out 19.3% of its earnings in the form of a dividend. Azul has increased its dividend for 3 consecutive years.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Alaska Air Group and Azul, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Alaska Air Group 0 1 8 1 3.00
Azul 0 0 4 0 3.00

Alaska Air Group currently has a consensus target price of $87.36, indicating a potential upside of 28.29%. Azul has a consensus target price of $33.00, indicating a potential upside of 31.53%. Given Azul’s higher probable upside, analysts plainly believe Azul is more favorable than Alaska Air Group.

Earnings & Valuation

This table compares Alaska Air Group and Azul’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Alaska Air Group $5.93 billion 1.41 $814.00 million $6.23 10.93
Azul $1.91 billion 4.22 -$36.21 million N/A N/A

Alaska Air Group has higher revenue and earnings than Azul.

Summary

Alaska Air Group beats Azul on 10 of the 14 factors compared between the two stocks.

About Alaska Air Group

Alaska Air Group, Inc. is the holding company of Alaska Airlines (Alaska), Virgin America Inc., Horizon Air (Horizon) and other business units. The Company operates through three segments: Mainline, Regional and Horizon. Its Mainline segment includes Alaska’s and Virgin America’s scheduled air transportation for passengers and cargo throughout the United States, and in parts of Canada, Mexico, Costa Rica and Cuba. Its Regional segment includes Horizon’s and other third-party carriers’ scheduled air transportation for passengers across a shorter distance network within the United States under capacity purchased arrangements (CPAs). Its Horizon segment includes the capacity sold to Alaska under CPA. Alaska and Virgin America operate fleets of narrowbody passenger jets. As of December 31, 2016, it maintained two frequent flyer plans: the Alaska Airlines Mileage Plan and the Virgin America Elevate.

About Azul

Azul SA is a Brazil-based company engaged in the provision of passenger transportation services. The Company primarily acts as an airline operator under the Azul brand name. The Company provides scheduled flights between numerous cities in Brazil, including Sao Paulo, Brasilia, Rio de Janeiro, Belo Horizonte, Porto Alegre, Curitiba, Manaus, Cuiaba, Fortaleza and Salvador, among others. In addition, its air network comprises international routes to the Unites States, Europe and other Latin American countries. The Company also offers Azul Cargo Express, a scheduled cargo transport service with airport-to-airport and door-to-door delivery. It owns a number of subsidiaries, such as Azul Linhas Aereas Brasileiras SA and Tudo Azul SA.

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