Delta Air Lines (NYSE: DAL) and China Southern Airlines Company Limited (NYSE:ZNH) are both mid-cap transportation companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, profitabiliy, valuation, risk, institutional ownership and earnings.

Dividends

Delta Air Lines pays an annual dividend of $0.81 per share and has a dividend yield of 1.7%. China Southern Airlines Company Limited pays an annual dividend of $0.64 per share and has a dividend yield of 1.7%. Delta Air Lines pays out 16.1% of its earnings in the form of a dividend. Delta Air Lines has raised its dividend for 2 consecutive years and China Southern Airlines Company Limited has raised its dividend for 3 consecutive years. China Southern Airlines Company Limited is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Delta Air Lines has a beta of 1.2, suggesting that its stock price is 20% more volatile than the S&P 500. Comparatively, China Southern Airlines Company Limited has a beta of 1.07, suggesting that its stock price is 7% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Delta Air Lines and China Southern Airlines Company Limited, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Delta Air Lines 0 1 15 0 2.94
China Southern Airlines Company Limited 1 0 1 0 2.00

Delta Air Lines presently has a consensus price target of $60.87, indicating a potential upside of 24.12%. Given Delta Air Lines’ stronger consensus rating and higher probable upside, analysts clearly believe Delta Air Lines is more favorable than China Southern Airlines Company Limited.

Earnings & Valuation

This table compares Delta Air Lines and China Southern Airlines Company Limited’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Delta Air Lines $39.88 billion 0.90 $7.48 billion $5.03 9.75
China Southern Airlines Company Limited $17.54 billion 0.41 $2.92 billion N/A N/A

Delta Air Lines has higher revenue and earnings than China Southern Airlines Company Limited.

Profitability

This table compares Delta Air Lines and China Southern Airlines Company Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Delta Air Lines 9.30% 28.33% 7.06%
China Southern Airlines Company Limited N/A N/A N/A

Insider & Institutional Ownership

87.7% of Delta Air Lines shares are held by institutional investors. Comparatively, 0.5% of China Southern Airlines Company Limited shares are held by institutional investors. 0.4% of Delta Air Lines shares 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.

Summary

Delta Air Lines beats China Southern Airlines Company Limited on 12 of the 16 factors compared between the two stocks.

About Delta Air Lines

Delta Air Lines, Inc. provides scheduled air transportation for passengers and cargo throughout the United States and across the world. The Company’s segments include Airline and Refinery. The Company’s route network is centered around a system of hub, international gateway and airports that the Company operates in Amsterdam, Atlanta, Boston, Detroit, London-Heathrow, Los Angeles, Minneapolis-St. Paul, New York-LaGuardia, New York- John F Kennedy International Airport, Paris-Charles de Gaulle, Salt Lake City, Seattle and Tokyo-Narita. Each of these operations includes flights that gather and distribute traffic from markets in the geographic region surrounding the hub or gateway to domestic and international cities and to other hubs or gateways. The Company’s route network includes its international joint ventures, its alliances with other foreign airlines, its membership in SkyTeam and agreements with multiple domestic regional carriers that operate as Delta Connection.

About China Southern Airlines Company Limited

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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