Reviewing Azul (AZUL) and LATAM Airlines Group (NYSE:LTM)

LATAM Airlines Group (NYSE: LTM) and Azul (NYSE:AZUL) are both transportation companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, profitability, institutional ownership, dividends, earnings, analyst recommendations and valuation.

Valuation & Earnings

This table compares LATAM Airlines Group and Azul’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
LATAM Airlines Group $8.99 billion 1.11 $69.22 million $0.24 68.67
Azul $1.91 billion 4.86 -$36.21 million $0.16 180.75

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

Institutional and Insider Ownership

3.2% of LATAM Airlines Group shares are owned by institutional investors. Comparatively, 4.6% of Azul shares are owned by institutional investors. 7.9% of LATAM Airlines Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares LATAM Airlines Group and Azul’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
LATAM Airlines Group 1.51% 3.36% 0.74%
Azul N/A N/A N/A

Analyst Recommendations

This is a summary of current ratings and recommmendations for LATAM Airlines Group and Azul, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LATAM Airlines Group 1 4 0 0 1.80
Azul 0 0 5 0 3.00

LATAM Airlines Group currently has a consensus price target of $11.00, suggesting a potential downside of 33.25%. Azul has a consensus price target of $30.95, suggesting a potential upside of 7.00%. Given Azul’s stronger consensus rating and higher possible upside, analysts clearly believe Azul is more favorable than LATAM Airlines Group.

Dividends

LATAM Airlines Group pays an annual dividend of $0.02 per share and has a dividend yield of 0.1%. Azul does not pay a dividend. LATAM Airlines Group pays out 8.3% of its earnings in the form of a dividend.

Summary

LATAM Airlines Group beats Azul on 8 of the 15 factors compared between the two stocks.

LATAM Airlines Group Company Profile

LATAM Airlines Group SA is a Chile-based company, which is engaged in passenger and cargo air transportation, both in the domestic markets of Chile, Peru, Argentina, Colombia, Ecuador and Brazil and in a developed series of regional and international routes in America, Europe and Oceania. These businesses are performed directly or through its subsidiaries in different countries. It operates through two segments: the Air transportation business and the Coalition and loyalty program Multiplus. It Air transportation segment corresponds to the route network for air transport. Its segment of Coalition and loyalty program called Multiplus is a frequent flyer programs, which operate as a unilateral system of loyalty that offers a flexible coalition system. The Company operates a fleet of over 329 aircrafts. Its passenger aircrafts include Airbus A319-100, Airbus A350-900, Boeing 767-300ER, Boeing 787-8, Boeing 787-9 and Boeing 777-300ER.

Azul Company Profile

Azul SA is a Brazil-based company engaged in the provision of passenger transportation services. The Company primarily acts as an airline operator under the Azul brand name. The Company provides scheduled flights between numerous cities in Brazil, including Sao Paulo, Brasilia, Rio de Janeiro, Belo Horizonte, Porto Alegre, Curitiba, Manaus, Cuiaba, Fortaleza and Salvador, among others. In addition, its air network comprises international routes to the Unites States, Europe and other Latin American countries. The Company also offers Azul Cargo Express, a scheduled cargo transport service with airport-to-airport and door-to-door delivery. It owns a number of subsidiaries, such as Azul Linhas Aereas Brasileiras SA and Tudo Azul SA.

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