Alaska Air Group (NYSE: ALK) and Virgin America (NASDAQ:VA) are both transportation companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, institutional ownership, profitability, earnings and risk.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Alaska Air Group and Virgin America, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Alaska Air Group 0 2 8 0 2.80
Virgin America 1 4 0 0 1.80

Alaska Air Group currently has a consensus target price of $103.11, indicating a potential upside of 31.44%. Virgin America has a consensus target price of $57.00, indicating a potential upside of 0.04%. Given Alaska Air Group’s stronger consensus rating and higher probable upside, research analysts clearly believe Alaska Air Group is more favorable than Virgin America.

Risk & Volatility

Alaska Air Group has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500. Comparatively, Virgin America has a beta of 1.56, meaning that its share price is 56% more volatile than the S&P 500.

Dividends

Alaska Air Group pays an annual dividend of $1.20 per share and has a dividend yield of 1.5%. Virgin America does not pay a dividend. Alaska Air Group pays out 19.5% of its earnings in the form of a dividend. Alaska Air Group has increased its dividend for 3 consecutive years.

Institutional & Insider Ownership

94.4% of Alaska Air Group shares are owned by institutional investors. Comparatively, 65.6% of Virgin America shares are owned by institutional investors. 0.6% of Alaska Air Group shares are owned by insiders. Comparatively, 31.2% of Virgin America 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.

Profitability

This table compares Alaska Air Group and Virgin America’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Alaska Air Group 11.02% 30.04% 9.14%
Virgin America 11.64% 22.78% 10.96%

Earnings & Valuation

This table compares Alaska Air Group and Virgin America’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Alaska Air Group $6.94 billion 1.40 $1.84 billion $6.16 12.74
Virgin America N/A N/A N/A $7.13 7.99

Alaska Air Group has higher revenue and earnings than Virgin America. Virgin America is trading at a lower price-to-earnings ratio than Alaska Air Group, indicating that it is currently the more affordable of the two stocks.

Summary

Alaska Air Group beats Virgin America on 8 of the 14 factors compared between the two stocks.

About Alaska Air Group

Alaska Air Group, Inc. is the holding company of Alaska Airlines (Alaska), Virgin America Inc., Horizon Air (Horizon) and other business units. The Company operates through three segments: Mainline, Regional and Horizon. Its Mainline segment includes Alaska’s and Virgin America’s scheduled air transportation for passengers and cargo throughout the United States, and in parts of Canada, Mexico, Costa Rica and Cuba. Its Regional segment includes Horizon’s and other third-party carriers’ scheduled air transportation for passengers across a shorter distance network within the United States under capacity purchased arrangements (CPAs). Its Horizon segment includes the capacity sold to Alaska under CPA. Alaska and Virgin America operate fleets of narrowbody passenger jets. As of December 31, 2016, it maintained two frequent flyer plans: the Alaska Airlines Mileage Plan and the Virgin America Elevate.

About Virgin America

Virgin America Inc. is an airline that provides scheduled air travel in the United States and Mexico. The Company operates in air transportation service segment. The Company operates from Los Angeles and San Francisco with a presence at Dallas Love Field (DAL) to other destinations in North America. The Company provides service to over 20 airports in the United States and Mexico with a fleet of over 60 narrow-body aircraft. It offers three levels of service: First Class, Main Cabin Select and Main Cabin. The Company’s First Class level of service includes eight-seat cabin with an inflight teammate to provide service. Its Main Cabin Select includes approximately 40 inches of pitch for leg room. The Company’s Main Cabin includes approximately 30 inches of pitch and individual Red inflight entertainment system at every seatback. The Company maintains a guest loyalty program called the Elevate frequent flyer program.

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