Head to Head Analysis: Allegiant Air (ALGT) vs. SkyWest (SKYW)

Allegiant Air (NASDAQ: ALGT) and SkyWest (NASDAQ:SKYW) are both mid-cap transportation companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, dividends, valuation, analyst recommendations, earnings, profitability and institutional ownership.

Profitability

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This table compares Allegiant Air and SkyWest’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Allegiant Air 12.96% 31.47% 8.07%
SkyWest 13.39% 12.08% 3.41%

Risk and Volatility

Allegiant Air has a beta of 0.07, indicating that its stock price is 93% less volatile than the S&P 500. Comparatively, SkyWest has a beta of 1.67, indicating that its stock price is 67% more volatile than the S&P 500.

Institutional and Insider Ownership

90.4% of Allegiant Air shares are held by institutional investors. Comparatively, 89.7% of SkyWest shares are held by institutional investors. 22.0% of Allegiant Air shares are held by insiders. Comparatively, 3.6% of SkyWest shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Allegiant Air and SkyWest’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Allegiant Air $1.50 billion 1.56 $194.90 million $9.55 15.33
SkyWest $3.20 billion 0.90 $428.90 million $3.43 16.15

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

Dividends

Allegiant Air pays an annual dividend of $2.80 per share and has a dividend yield of 1.9%. SkyWest pays an annual dividend of $0.40 per share and has a dividend yield of 0.7%. Allegiant Air pays out 29.3% of its earnings in the form of a dividend. SkyWest pays out 11.7% 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.

Analyst Recommendations

This is a summary of recent ratings for Allegiant Air and SkyWest, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Allegiant Air 1 6 6 0 2.38
SkyWest 0 1 2 1 3.00

Allegiant Air currently has a consensus target price of $163.00, suggesting a potential upside of 11.34%. SkyWest has a consensus target price of $59.25, suggesting a potential upside of 6.95%. Given Allegiant Air’s higher probable upside, research analysts clearly believe Allegiant Air is more favorable than SkyWest.

Summary

Allegiant Air beats SkyWest on 9 of the 17 factors compared between the two stocks.

Allegiant Air Company Profile

Allegiant Travel Company, a leisure travel company, focuses on the provision of travel services and products to residents of under-served cities in the United States. The company offers scheduled air transportation on limited frequency nonstop flights between under-served cities and leisure destinations. As of February 2, 2018, it operated a fleet of 37 MD-80 aircraft and 53 Airbus A320 series aircraft provided services on 396 routes to 119 cities. The company also provides air-related services and products in conjunction with air transportation, including convenience fees, baggage fees, advance seat assignments, travel protection products, change fees, priority boarding, food and beverage purchases on board, and other air-related services, as well as use of its call center for purchases. In addition, it offers third party travel products, such as hotel rooms, ground transportation, and attractions; and air transportation services through fixed fee agreements and charter service on a year-round and ad-hoc basis. Further, the company offers leases spare engines to a third party; and offers management solutions to golf courses. Allegiant Travel Company was founded in 1997 and is based in Las Vegas, Nevada.

SkyWest Company Profile

SkyWest, Inc. is the holding company for two scheduled passenger airline operations and an aircraft leasing company. SkyWest’s airline companies provide commercial air service in cities throughout North America with nearly 3,000 daily flights carrying more than 53 million passengers annually. SkyWest Airlines operates through partnerships with United Airlines, Delta Air Lines, American Airlines and Alaska Airlines. ExpressJet Airlines operates through partnerships with United Airlines, Delta Air Lines and American Airlines. Based in St. George, Utah, SkyWest employs nearly 17,000 employees.

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