Analyzing LATAM Airlines Group (NYSE:LTM) and China Southern Airlines Company Limited (ZNH)
LATAM Airlines Group (NYSE: LTM) and China Southern Airlines Company Limited (NYSE:ZNH) are both mid-cap transportation companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, profitabiliy, valuation, risk, earnings, institutional ownership and dividends.
This is a breakdown of recent ratings and price targets for LATAM Airlines Group and China Southern Airlines Company Limited, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|LATAM Airlines Group||1||5||1||0||2.00|
|China Southern Airlines Company Limited||1||0||1||0||2.00|
LATAM Airlines Group presently has a consensus price target of $10.20, indicating a potential downside of 16.73%. Given LATAM Airlines Group’s higher probable upside, equities analysts plainly believe LATAM Airlines Group is more favorable than China Southern Airlines Company Limited.
Risk & Volatility
LATAM Airlines Group has a beta of 1.59, meaning that its share price is 59% more volatile than the S&P 500. Comparatively, China Southern Airlines Company Limited has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500.
This table compares LATAM Airlines Group and China Southern Airlines Company Limited’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|LATAM Airlines Group||0.36%||1.01%||0.21%|
|China Southern Airlines Company Limited||N/A||N/A||N/A|
Valuation and Earnings
This table compares LATAM Airlines Group and China Southern Airlines Company Limited’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|LATAM Airlines Group||$9.11 billion||0.82||$1.36 billion||$0.05||245.00|
|China Southern Airlines Company Limited||$17.42 billion||0.42||$2.90 billion||N/A||N/A|
China Southern Airlines Company Limited has higher revenue and earnings than LATAM Airlines Group.
LATAM Airlines Group pays an annual dividend of $0.02 per share and has a dividend yield of 0.2%. China Southern Airlines Company Limited pays an annual dividend of $0.64 per share and has a dividend yield of 1.7%. LATAM Airlines Group pays out 40.0% of its earnings in the form of a dividend. China Southern Airlines Company Limited has raised its dividend for 2 consecutive years. China Southern Airlines Company Limited is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider & Institutional Ownership
3.2% of LATAM Airlines Group shares are owned by institutional investors. Comparatively, 0.5% of China Southern Airlines Company Limited shares are owned by institutional investors. 7.8% of LATAM Airlines Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
LATAM Airlines Group beats China Southern Airlines Company Limited on 9 of the 14 factors compared between the two stocks.
LATAM Airlines Group Company Profile
LATAM Airlines Group S.A. is a Chile-based company, which is engaged in passenger and cargo air transportation, both in the domestic markets of Chile, Peru, Argentina, Colombia, Ecuador and Brazil and in a developed series of regional and international routes in America, Europe and Oceania. These businesses are performed directly or through its subsidiaries in different countries. It operates through two segments: the air transportation business, and the coalition and loyalty program Multiplus. It Air transport segment corresponds to the route network for air transport. Its segment of loyalty coalition called Multiplus is a frequent flyer programs, which operate as a unilateral system of loyalty that offers a flexible coalition system. As of December 31, 2016, the Company operated a fleet of over 329 aircraft. Its passenger aircraft include Airbus A319-100, Airbus A350-900, Boeing 767-300ER, Boeing 787-8, Boeing 787-9 and Boeing 777-300ER.
China Southern Airlines Company Limited Company Profile
China Southern Airlines Company Limited is principally engaged in the operation of civil aviation, including the provision of passenger, cargo, mail delivery and other extended transportation services. The Company operates through two business segments, including Airline Transportation segment and Other segment. Airline Transportation segment consist of passenger and cargo and mail operations. Other segment includes hotel and tour operation, ground services, cargo handling and other miscellaneous services. . The Company also provides services of general aviation and aircraft maintenance. The Company acts as an agency of domestic and foreign airlines, and other aviation and related business, such as personal accident insurance and agency business.
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