Financial Survey: Allegiant Travel (ALGT) & Mesa Air Group (MESA)

Mesa Air Group (NASDAQ:MESA) and Allegiant Travel (NASDAQ:ALGT) are both transportation companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, profitability, risk, earnings, analyst recommendations and valuation.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Mesa Air Group and Allegiant Travel, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mesa Air Group 0 0 4 1 3.20
Allegiant Travel 1 3 7 0 2.55

Mesa Air Group presently has a consensus price target of $16.60, suggesting a potential upside of 77.92%. Allegiant Travel has a consensus price target of $152.82, suggesting a potential upside of 12.01%. Given Mesa Air Group’s stronger consensus rating and higher possible upside, analysts plainly believe Mesa Air Group is more favorable than Allegiant Travel.

Insider and Institutional Ownership

63.8% of Mesa Air Group shares are held by institutional investors. Comparatively, 82.9% of Allegiant Travel shares are held by institutional investors. 4.6% of Mesa Air Group shares are held by company insiders. Comparatively, 20.8% of Allegiant Travel shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Mesa Air Group N/A N/A N/A
Allegiant Travel 9.70% 25.58% 6.84%

Dividends

Allegiant Travel pays an annual dividend of $2.80 per share and has a dividend yield of 2.1%. Mesa Air Group does not pay a dividend. Allegiant Travel pays out 28.0% of its earnings in the form of a dividend.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Mesa Air Group $681.59 million 0.33 $33.25 million $1.23 7.59
Allegiant Travel $1.67 billion 1.32 $161.80 million $10.00 13.64

Allegiant Travel has higher revenue and earnings than Mesa Air Group. Mesa Air Group 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

Allegiant Travel beats Mesa Air Group on 12 of the 16 factors compared between the two stocks.

Mesa Air Group Company Profile

Mesa Air Group, Inc. operates as the holding company for Mesa Airlines, Inc., which provides regional air carrier services under capacity purchase agreements with the American Airlines and the United Airlines. As of September 30, 2018, it operated a fleet of 145 aircraft with approximately 730 daily departures to 110 cities in the United States, Canada, Mexico, Cuba, and the Bahamas. The company was founded in 1982 and is headquartered in Phoenix, Arizona.

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 May 23, 2018, it operated a fleet of 99 Airbus aircraft. 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.

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