United Continental Holdings (NYSE: UAL) and SkyWest (NASDAQ:SKYW) are both transportation companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, analyst recommendations, dividends, profitabiliy, valuation, institutional ownership and earnings.

Institutional & Insider Ownership

97.2% of United Continental Holdings shares are held by institutional investors. Comparatively, 91.2% of SkyWest shares are held by institutional investors. 0.3% of United Continental Holdings shares are held by insiders. Comparatively, 3.5% of SkyWest shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility and Risk

United Continental Holdings has a beta of 1.04, indicating that its stock price is 4% more volatile than the S&P 500. Comparatively, SkyWest has a beta of 1.72, indicating that its stock price is 72% more volatile than the S&P 500.

Dividends

SkyWest pays an annual dividend of $0.32 per share and has a dividend yield of 0.9%. United Continental Holdings does not pay a dividend. SkyWest pays out -10.6% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of current ratings and target prices for United Continental Holdings and SkyWest, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
United Continental Holdings 0 8 8 0 2.50
SkyWest 0 2 2 1 2.80

United Continental Holdings currently has a consensus target price of $72.68, suggesting a potential downside of 5.51%. SkyWest has a consensus target price of $40.50, suggesting a potential upside of 11.96%. Given SkyWest’s stronger consensus rating and higher probable upside, analysts clearly believe SkyWest is more favorable than United Continental Holdings.

Profitability

This table compares United Continental Holdings and SkyWest’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
United Continental Holdings 5.56% 30.61% 6.28%
SkyWest -4.93% 10.12% 2.92%

Valuation and Earnings

This table compares United Continental Holdings and SkyWest’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
United Continental Holdings $36.78 billion 0.65 $6.37 billion $6.36 12.09
SkyWest $3.12 billion 0.60 $594.73 million ($3.01) -12.02

United Continental Holdings has higher revenue and earnings than SkyWest. SkyWest 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.

Summary

United Continental Holdings beats SkyWest on 9 of the 16 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.

SkyWest Company Profile

SkyWest, Inc., through its subsidiaries, SkyWest Airlines, Inc. (SkyWest Airlines) and ExpressJet Airlines, Inc. (ExpressJet), operates regional airline operations in the United States. The Company’s segments include SkyWest Airlines, ExpressJet and SkyWest Leasing. The SkyWest Airlines segment provides regional jet service to airports primarily located in the Midwestern and Western United States, as well as Mexico and Canada. The ExpressJet segment provides regional jet service to airports primarily located in the Eastern and Midwestern United States, as well as Mexico, Canada and the Caribbean. The SkyWest Leasing segment includes its E175 aircraft ownership business. As of December 31, 2016, the Company offered scheduled passenger service with approximately 3,160 daily departures to destinations in the United States, Canada, Mexico and the Caribbean. The Company’s flights are operated as Delta Connection, United Express, American Eagle or Alaska Airlines.

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