Spirit Airlines (NASDAQ: SAVE) and Avianca Holdings (NYSE:AVH) are both transportation companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, earnings, dividends, analyst recommendations, institutional ownership and profitabiliy.

Analyst Ratings

This is a summary of current ratings and recommmendations for Spirit Airlines and Avianca Holdings, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Spirit Airlines 0 5 7 0 2.58
Avianca Holdings 1 3 0 0 1.75

Spirit Airlines currently has a consensus price target of $54.80, indicating a potential upside of 40.33%. Avianca Holdings has a consensus price target of $9.00, indicating a potential upside of 26.94%. Given Spirit Airlines’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Spirit Airlines is more favorable than Avianca Holdings.

Profitability

This table compares Spirit Airlines and Avianca Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Spirit Airlines 9.62% 17.96% 7.61%
Avianca Holdings 1.46% 11.82% 1.59%

Dividends

Avianca Holdings pays an annual dividend of $0.09 per share and has a dividend yield of 1.3%. Spirit Airlines does not pay a dividend. Avianca Holdings pays out 18.4% of its earnings in the form of a dividend.

Risk & Volatility

Spirit Airlines has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500. Comparatively, Avianca Holdings has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500.

Insider & Institutional Ownership

2.8% of Avianca Holdings shares are owned by institutional investors. 0.3% of Spirit Airlines shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Spirit Airlines and Avianca Holdings’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Spirit Airlines $2.49 billion 1.09 $509.32 million $3.45 11.32
Avianca Holdings $4.20 billion 0.21 $511.81 million $0.49 14.47

Avianca Holdings has higher revenue and earnings than Spirit Airlines. Spirit Airlines is trading at a lower price-to-earnings ratio than Avianca Holdings, indicating that it is currently the more affordable of the two stocks.

Summary

Spirit Airlines beats Avianca Holdings on 11 of the 16 factors compared between the two stocks.

About Spirit Airlines

Spirit Airlines, Inc. is an airline company. The Company provides air transportation for passengers. As of December 31, 2016, its all-Airbus Fit Fleet operated over 420 daily flights to 59 destinations in the United States, Caribbean and Latin America. As of December 31, 2016, it had a fleet of 95 Airbus single-aisle aircraft, which are referred to as A320 family aircraft and include the A319, A320 and A321 models, which have common design and equipment but differ most notably in fuselage length, service range and seat capacity. As of December 31, 2016, its fleet consisted of 29 A319s, 45 A320ceos, five A320neos and 16 A321ceos. Its Bare Fares offerings are unbundled base fares that remove components included in the price of an airline ticket. It also offers Frill Control, which allows customers to pay only for the options they choose, such as bags, advance seat assignments and refreshments. As of December 31, 2016, its route network included 200 markets served by 59 airports.

About Avianca Holdings

Avianca Holdings SA is a Panama-based company engaged, through its subsidiaries, in the provision of air transportation services for passengers and commercial purposes. The Company was originally established as a strategic alliance between Aerovias del Continente Americano SA (AVIANCA) and Grupo TACA Holdings Limited (GTH), and it mainly operates in North, Central and South America, the Caribbean and Europe. In addition, through codeshare agreements, the Company is active in the operation of other international passenger air routes. As of December 31, 2011, the Company owned such subsidiaries as Latin Airways Corporation and LifeMiles Corporation, among others. On December 28, 2012, the merger of subsidiaries Latin Airways Corporation, as absorbing company, with Synergy Ocean Air Colombia SAS and Soac 2 SAS was formalized. On June 18, 2013, the Company received the first out of 15 ATR 72-600, a turbo-propelled aircraft from ATR, a company engaged in regional aircraft.

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