Spirit Airlines (NASDAQ: SAVE) and SkyWest (NASDAQ:SKYW) are both mid-cap transportation companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, dividends, profitability, earnings and risk.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Spirit Airlines and SkyWest, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Spirit Airlines 0 8 4 0 2.33
SkyWest 0 2 2 1 2.80

Spirit Airlines currently has a consensus target price of $47.40, indicating a potential upside of 36.80%. SkyWest has a consensus target price of $43.50, indicating a potential downside of 5.43%. Given Spirit Airlines’ higher possible upside, equities analysts plainly believe Spirit Airlines is more favorable than SkyWest.

Volatility & Risk

Spirit Airlines has a beta of 0.66, suggesting that its share price is 34% less volatile than the S&P 500. Comparatively, SkyWest has a beta of 1.68, suggesting that its share price is 68% more volatile than the S&P 500.

Dividends

SkyWest pays an annual dividend of $0.32 per share and has a dividend yield of 0.7%. Spirit Airlines does not pay a dividend. SkyWest pays out -11.3% of its earnings in the form of a dividend.

Profitability

This table compares Spirit Airlines and SkyWest’s 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%
SkyWest -4.59% 11.10% 3.06%

Institutional and Insider Ownership

97.0% of Spirit Airlines shares are owned by institutional investors. Comparatively, 89.4% of SkyWest shares are owned by institutional investors. 0.3% of Spirit Airlines shares are owned by company insiders. Comparatively, 3.5% of SkyWest shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Spirit Airlines and SkyWest’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Spirit Airlines $2.49 billion 0.97 $509.32 million $3.45 10.04
SkyWest $3.13 billion 0.76 $618.51 million ($2.83) -16.25

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

Summary

SkyWest beats Spirit Airlines on 9 of the 17 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 SkyWest

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.

Receive News & Ratings for Spirit Airlines Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Spirit Airlines Inc. and related companies with MarketBeat.com's FREE daily email newsletter.