Critical Analysis: Copa (CPA) vs. Virgin America (NASDAQ:VA)

Virgin America (NASDAQ: VA) 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 dividends, profitability, analyst recommendations, risk, valuation, institutional ownership and earnings.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Virgin America N/A N/A N/A $6.68 8.53
Copa $2.22 billion 2.66 $334.54 million $8.46 15.61

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

Dividends

Copa pays an annual dividend of $3.00 per share and has a dividend yield of 2.3%. Virgin America does not pay a dividend. Copa pays out 35.5% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of recent recommendations for Virgin America and Copa, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Virgin America 0 0 0 0 N/A
Copa 0 5 3 0 2.38

Copa has a consensus price target of $133.83, suggesting a potential upside of 1.37%. Given Copa’s higher possible upside, analysts clearly believe Copa is more favorable than Virgin America.

Institutional & Insider Ownership

65.6% of Virgin America shares are held by institutional investors. Comparatively, 61.4% of Copa shares are held by institutional investors. 31.2% of Virgin America shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Virgin America and Copa’s 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%
Copa 14.88% 16.81% 8.14%

Summary

Copa beats Virgin America on 7 of the 12 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.

Copa Company Profile

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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