Contrasting Aircastle Limited (AYR) & Air Lease Corporation (AL)
Air Lease Corporation (NYSE: AL) and Aircastle Limited (NYSE:AYR) are both transportation companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, analyst recommendations, profitabiliy, institutional ownership, valuation, risk and dividends.
This is a breakdown of recent recommendations and price targets for Air Lease Corporation and Aircastle Limited, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Air Lease Corporation||0||1||5||0||2.83|
Air Lease Corporation currently has a consensus price target of $44.40, suggesting a potential upside of 20.52%. Aircastle Limited has a consensus price target of $24.25, suggesting a potential upside of 12.06%. Given Air Lease Corporation’s stronger consensus rating and higher probable upside, research analysts plainly believe Air Lease Corporation is more favorable than Aircastle Limited.
Earnings & Valuation
This table compares Air Lease Corporation and Aircastle Limited’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Air Lease Corporation||$1.44 billion||2.64||$347.66 million||$3.37||10.93|
|Aircastle Limited||$788.43 million||2.16||$157.43 million||$2.00||10.82|
Air Lease Corporation has higher revenue and earnings than Aircastle Limited. Aircastle Limited is trading at a lower price-to-earnings ratio than Air Lease Corporation, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
92.1% of Air Lease Corporation shares are held by institutional investors. Comparatively, 63.4% of Aircastle Limited shares are held by institutional investors. 9.8% of Air Lease Corporation shares are held by company insiders. Comparatively, 2.7% of Aircastle Limited shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Risk and Volatility
Air Lease Corporation has a beta of 1.69, indicating that its share price is 69% more volatile than the S&P 500. Comparatively, Aircastle Limited has a beta of 1.81, indicating that its share price is 81% more volatile than the S&P 500.
Air Lease Corporation pays an annual dividend of $0.30 per share and has a dividend yield of 0.8%. Aircastle Limited pays an annual dividend of $1.04 per share and has a dividend yield of 4.8%. Air Lease Corporation pays out 8.9% of its earnings in the form of a dividend. Aircastle Limited pays out 52.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Air Lease Corporation has increased its dividend for 6 consecutive years and Aircastle Limited has increased its dividend for 3 consecutive years.
This table compares Air Lease Corporation and Aircastle Limited’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Air Lease Corporation||25.56%||11.02%||2.65%|
Air Lease Corporation beats Aircastle Limited on 15 of the 17 factors compared between the two stocks.
About Air Lease Corporation
Air Lease Corporation is an aircraft leasing company. The Company is principally engaged in purchasing new commercial jet transport aircraft directly from aircraft manufacturers, such as The Boeing Company (Boeing) and Airbus S.A.S. (Airbus), and leasing those aircraft to airlines across the world. Along with its leasing activities, the Company sells aircraft from its operating lease portfolio to third parties, including other leasing companies, financial services companies and airlines. The Company also provides fleet management services to investors and owners of aircraft portfolios for a management fee. The Company provides aircraft to airline customers in various markets, such as Asia, the Pacific Rim, Latin America, the Middle East, Europe, Africa and North America. As of December 31, 2016, the Company had 237 owned aircraft and 30 aircraft in its managed fleet portfolio.
About Aircastle Limited
Aircastle Limited is a holding company. The Company, through its subsidiaries, acquires, leases and sells commercial jet aircrafts to airlines. The Company is engaged in financing and managing commercial flight equipment. The Company manages its aircrafts in the United States, Ireland and Singapore. As of December 31, 2016, the Company owned and managed on behalf of its joint ventures 206 aircrafts leased to 71 lessees located in 36 countries. The Company originates acquisitions and sales through relationships with airlines, other aircraft lessors, financial institutions and brokers, as well as other sources. As of February 7, 2017, the Company had lease commitments or letters of intent to lease or sell 16 aircrafts. The Company’s aircraft portfolio includes passenger wide-body, passenger narrow-body and freighter aircrafts. The Company’s portfolio spans across various regions, such as the Middle East and Africa, South America, North America, Asia and Pacific, and Europe.
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