Analyzing China Eastern Airlines (CEA) & Its Rivals

China Eastern Airlines (NYSE: CEA) is one of 24 publicly-traded companies in the “Air transportation, scheduled” industry, but how does it weigh in compared to its competitors? We will compare China Eastern Airlines to similar businesses based on the strength of its profitability, dividends, institutional ownership, risk, valuation, analyst recommendations and earnings.

Insider and Institutional Ownership

0.5% of China Eastern Airlines shares are held by institutional investors. Comparatively, 79.5% of shares of all “Air transportation, scheduled” companies are held by institutional investors. 3.7% of shares of all “Air transportation, scheduled” companies are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

China Eastern Airlines pays an annual dividend of $0.32 per share and has a dividend yield of 0.7%. China Eastern Airlines pays out 9.8% of its earnings in the form of a dividend. As a group, “Air transportation, scheduled” companies pay a dividend yield of 1.8% and pay out 19.6% of their earnings in the form of a dividend.

Risk and Volatility

China Eastern Airlines has a beta of 1.65, meaning that its share price is 65% more volatile than the S&P 500. Comparatively, China Eastern Airlines’ competitors have a beta of 1.12, meaning that their average share price is 12% more volatile than the S&P 500.

Profitability

This table compares China Eastern Airlines and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
China Eastern Airlines 5.23% 9.49% 2.44%
China Eastern Airlines Competitors 8.62% 25.53% 6.08%

Analyst Recommendations

This is a breakdown of current ratings for China Eastern Airlines and its competitors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
China Eastern Airlines 1 1 0 0 1.50
China Eastern Airlines Competitors 337 1200 1776 145 2.50

As a group, “Air transportation, scheduled” companies have a potential upside of 20.71%. Given China Eastern Airlines’ competitors stronger consensus rating and higher probable upside, analysts plainly believe China Eastern Airlines has less favorable growth aspects than its competitors.

Valuation and Earnings

This table compares China Eastern Airlines and its competitors revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
China Eastern Airlines $15.17 billion $938.61 million 13.32
China Eastern Airlines Competitors $14.94 billion $1.02 billion 9.77

China Eastern Airlines has higher revenue, but lower earnings than its competitors. China Eastern Airlines is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Summary

China Eastern Airlines competitors beat China Eastern Airlines on 11 of the 15 factors compared.

China Eastern Airlines Company Profile

China Eastern Airlines Corporation Limited, together with its subsidiaries, operates in the civil aviation industry. It offers passenger, cargo, mail delivery, ground, cargo handling, tour operations and other extended transportation services. The company also provides flight training, cargo carriage, cargo logistics, and airlines consultation and maintenance services. In addition, it is involved in the provision of import and export, investment, leasing, and consultation services; hotel services; tour, travel and air ticketing agency, and transportation operations; and the provision research and development of technology and products in the field of aviation. Further, the company engages in the operation of e-commerce platform. As of December 31, 2016, the company operated a fleet of 596 aircraft, including 572 passenger aircraft, 9 freighters, and 15 business aircrafts. It has operations in the People's Republic of China and internationally. The company was founded in 1988 and is based in Shanghai, the People's Republic of China. China Eastern Airlines Corporation Limited is a subsidiary of China Eastern Air Holding Company.

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