Analyzing Allegiant Travel (ALGT) and Copa (CPA)

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

Institutional and Insider Ownership

89.3% of Allegiant Travel shares are owned by institutional investors. Comparatively, 64.8% of Copa shares are owned by institutional investors. 20.8% of Allegiant Travel shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Allegiant Travel and Copa’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Allegiant Travel 13.42% 32.61% 8.20%
Copa 15.39% 19.24% 9.51%

Dividends

Allegiant Travel pays an annual dividend of $2.80 per share and has a dividend yield of 2.0%. Copa pays an annual dividend of $3.48 per share and has a dividend yield of 3.7%. Allegiant Travel pays out 29.3% of its earnings in the form of a dividend. Copa pays out 40.2% 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 Ratings

This is a summary of recent ratings and recommmendations for Allegiant Travel and Copa, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Allegiant Travel 1 5 7 0 2.46
Copa 0 3 6 1 2.80

Allegiant Travel currently has a consensus target price of $164.36, suggesting a potential upside of 18.37%. Copa has a consensus target price of $135.57, suggesting a potential upside of 43.84%. Given Copa’s stronger consensus rating and higher probable upside, analysts clearly believe Copa is more favorable than Allegiant Travel.

Risk & Volatility

Allegiant Travel has a beta of 0.06, meaning that its stock price is 94% less volatile than the S&P 500. Comparatively, Copa has a beta of 1.72, meaning that its stock price is 72% more volatile than the S&P 500.

Valuation and Earnings

This table compares Allegiant Travel and Copa’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Allegiant Travel $1.50 billion 1.49 $194.90 million $9.55 14.54
Copa $2.53 billion 1.57 $370.02 million $8.66 10.88

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

Summary

Copa beats Allegiant Travel on 10 of the 17 factors compared between the two stocks.

Allegiant Travel 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.

Copa Company Profile

Copa Holdings, S.A., through its subsidiaries, provides airline passenger and cargo services. The company offers flights to 75 destinations in 31 countries in North, Central, and South America, as well as the Caribbean. As of April 12, 2018, it operated a fleet of 101 aircraft comprising 81 Boeing 737NG aircraft and 20 EMBRAER-190s aircraft. Copa Holdings, S.A. was founded in 1947 and is based in Panama City, Panama.

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