Contrasting Delta Air Lines (DAL) and Copa (CPA)

Delta Air Lines (NYSE: DAL) and Copa (NYSE:CPA) are both industrials companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.

Dividends

Delta Air Lines pays an annual dividend of $1.22 per share and has a dividend yield of 2.4%. Copa pays an annual dividend of $3.00 per share and has a dividend yield of 2.4%. Delta Air Lines pays out 24.7% of its earnings in the form of a dividend. Copa pays out 34.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Delta Air Lines has raised its dividend for 4 consecutive years.

Risk & Volatility

Delta Air Lines has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500. Comparatively, Copa has a beta of 1.86, indicating that its stock price is 86% more volatile than the S&P 500.

Earnings & Valuation

This table compares Delta Air Lines and Copa’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Delta Air Lines $41.24 billion 0.88 $3.58 billion $4.94 10.36
Copa $2.22 billion 2.53 $334.54 million $8.61 14.62

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

Profitability

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

Net Margins Return on Equity Return on Assets
Delta Air Lines 8.67% 26.28% 6.85%
Copa 14.88% 16.81% 8.14%

Institutional and Insider Ownership

85.1% of Delta Air Lines shares are held by institutional investors. Comparatively, 60.9% of Copa shares are held by institutional investors. 0.4% of Delta Air Lines shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Delta Air Lines and Copa, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Delta Air Lines 0 0 15 0 3.00
Copa 0 4 3 0 2.43

Delta Air Lines presently has a consensus price target of $67.14, suggesting a potential upside of 31.19%. Copa has a consensus price target of $133.83, suggesting a potential upside of 6.34%. Given Delta Air Lines’ stronger consensus rating and higher possible upside, analysts plainly believe Delta Air Lines is more favorable than Copa.

Summary

Delta Air Lines beats Copa on 10 of the 17 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 Copa

Copa Holdings, S.A. is a provider of airline passenger and cargo service through its principal operating subsidiaries, Compania Panamena de Aviacion, S. A. (Copa Airlines) and AeroRepublica, S. A. (Copa Colombia). The Company operates through air transportation segment. Copa Airlines operates from its position located in the Republic of Panama. Copa Airlines provides international air transportation for passengers, cargo and mail, operating from its Panama City hub in the Republic of Panama. Copa Colombia provides service within Colombia and international flights from various cities in Colombia to Panama, Venezuela, Ecuador, Mexico, Cuba, Guatemala and Costa Rica. Copa Colombia provides domestic and international air transportation for passengers, cargo and mail with a point-to-point route network. Its subsidiary, Oval Financial Leasing, Ltd., controls the special purpose entities that have a beneficial interest in the majority of its fleet.

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