Virgin America (NASDAQ: VA) and Delta Air Lines (NYSE:DAL) are both industrials companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, profitability, institutional ownership, dividends, valuation and risk.

Valuation and Earnings

This table compares Virgin America and Delta Air Lines’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Virgin America N/A N/A N/A $7.13 7.99
Delta Air Lines $39.88 billion 0.96 $7.48 billion $4.98 10.59

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

Risk & Volatility

Virgin America has a beta of 1.56, suggesting that its stock price is 56% more volatile than the S&P 500. Comparatively, Delta Air Lines has a beta of 1.24, suggesting that its stock price is 24% more volatile than the S&P 500.

Dividends

Delta Air Lines pays an annual dividend of $1.22 per share and has a dividend yield of 2.3%. Virgin America does not pay a dividend. Delta Air Lines pays out 24.5% of its earnings in the form of a dividend. Delta Air Lines has raised its dividend for 3 consecutive years.

Institutional & Insider Ownership

65.6% of Virgin America shares are held by institutional investors. Comparatively, 86.2% of Delta Air Lines shares are held by institutional investors. 31.2% of Virgin America shares are held by insiders. Comparatively, 0.4% of Delta Air Lines shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings for Virgin America and Delta Air Lines, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Virgin America 1 1 0 0 1.50
Delta Air Lines 0 0 15 0 3.00

Virgin America presently has a consensus price target of $57.00, suggesting a potential upside of 0.04%. Delta Air Lines has a consensus price target of $64.62, suggesting a potential upside of 22.47%. Given Delta Air Lines’ stronger consensus rating and higher possible upside, analysts plainly believe Delta Air Lines is more favorable than Virgin America.

Profitability

This table compares Virgin America and Delta Air Lines’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Virgin America 11.64% 22.78% 10.96%
Delta Air Lines 8.97% 26.50% 6.77%

Summary

Delta Air Lines beats Virgin America on 8 of the 14 factors compared between the two stocks.

Virgin America Company Profile

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.

Delta Air Lines Company Profile

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.

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