Critical Analysis: China Southern Airlines (ZNH) versus The Competition
China Southern Airlines (NYSE: ZNH) is one of 27 publicly-traded companies in the “Airlines” industry, but how does it contrast to its competitors? We will compare China Southern Airlines to related businesses based on the strength of its dividends, earnings, profitability, valuation, analyst recommendations, institutional ownership and risk.
This table compares China Southern Airlines and its competitors’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|China Southern Airlines||N/A||N/A||N/A|
|China Southern Airlines Competitors||4.24%||16.96%||5.74%|
This is a summary of recent ratings and target prices for China Southern Airlines and its competitors, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|China Southern Airlines||1||0||0||0||1.00|
|China Southern Airlines Competitors||324||1108||2214||102||2.56|
As a group, “Airlines” companies have a potential downside of 7.61%. Given China Southern Airlines’ competitors stronger consensus rating and higher probable upside, analysts clearly believe China Southern Airlines has less favorable growth aspects than its competitors.
Risk and Volatility
China Southern Airlines has a beta of 1.2, indicating that its stock price is 20% more volatile than the S&P 500. Comparatively, China Southern Airlines’ competitors have a beta of 1.22, indicating that their average stock price is 22% more volatile than the S&P 500.
China Southern Airlines pays an annual dividend of $0.64 per share and has a dividend yield of 1.4%. China Southern Airlines pays out 17.7% of its earnings in the form of a dividend. As a group, “Airlines” companies pay a dividend yield of 1.6% and pay out 25.9% of their earnings in the form of a dividend. China Southern Airlines has increased its dividend for 2 consecutive years.
Institutional & Insider Ownership
0.5% of China Southern Airlines shares are held by institutional investors. Comparatively, 77.6% of shares of all “Airlines” companies are held by institutional investors. 6.1% of shares of all “Airlines” companies are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Earnings and Valuation
This table compares China Southern Airlines and its competitors top-line revenue, earnings per share and valuation.
|Gross Revenue||Net Income||Price/Earnings Ratio|
|China Southern Airlines||$17.31 billion||$759.12 million||12.85|
|China Southern Airlines Competitors||$9.83 billion||$754.70 million||341.15|
China Southern Airlines has higher revenue and earnings than its competitors. China Southern Airlines is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.
China Southern Airlines competitors beat China Southern Airlines on 11 of the 14 factors compared.
China Southern Airlines 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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