Critical Survey: ANA (OTCMKTS:ALNPY) versus Southwest Airlines (NYSE:LUV)

ANA (OTCMKTS:ALNPY) and Southwest Airlines (NYSE:LUV) are both transportation companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, dividends, valuation and analyst recommendations.

Earnings & Valuation

This table compares ANA and Southwest Airlines”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ANA	$14.85 billion	0.61	$1.01 billion	$0.42	9.18
Southwest Airlines	$28.06 billion	0.73	$441.00 million	$0.84	49.61

ANA has higher earnings, but lower revenue than Southwest Airlines. ANA is trading at a lower price-to-earnings ratio than Southwest Airlines, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings for ANA and Southwest Airlines, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ANA	0	1	0	0	2.00
Southwest Airlines	4	8	8	1	2.29

Southwest Airlines has a consensus price target of $47.71, indicating a potential upside of 14.49%. Given Southwest Airlines’ stronger consensus rating and higher probable upside, analysts plainly believe Southwest Airlines is more favorable than ANA.

Dividends

ANA pays an annual dividend of $0.06 per share and has a dividend yield of 1.6%. Southwest Airlines pays an annual dividend of $0.72 per share and has a dividend yield of 1.7%. ANA pays out 14.3% of its earnings in the form of a dividend. Southwest Airlines pays out 85.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional & Insider Ownership

80.8% of Southwest Airlines shares are owned by institutional investors. 0.8% of Southwest Airlines shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk and Volatility

ANA has a beta of 0.4, suggesting that its share price is 60% less volatile than the S&P 500. Comparatively, Southwest Airlines has a beta of 1.1, suggesting that its share price is 10% more volatile than the S&P 500.

Profitability

This table compares ANA and Southwest Airlines’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ANA	6.47%	12.84%	4.23%
Southwest Airlines	1.57%	6.18%	1.72%

Summary

Southwest Airlines beats ANA on 12 of the 17 factors compared between the two stocks.

About ANA

ANA Holdings Inc., together with its subsidiaries, provides air transportation services in Japan and internationally. It operates through Air Transportation, Aviation-Related Business, Travel Business, and Trading Business segments. The Air Transportation segment offers regular and irregular air transport of passengers, cargo, etc. on domestic and international routes. The Aviation-Related Business segment provides services incidental to air transportation, such as airport handling and maintenance. The Travel Business develops and sells travel products, as well as plans and sells package travel products. The Trading Business imports and exports aviation-related materials, as well as sells through stores and mail-order channels. The company was formerly known as All Nippon Airways Co., Ltd. and changed its name to ANA Holdings Inc. in April 2013. ANA Holdings Inc. was incorporated in 1920 and is headquartered in Minato, Japan.

About Southwest Airlines

Southwest Airlines Co. operates as a passenger airline company that provides scheduled air transportation services in the United States and near-international markets. As of December 31, 2023, the company operated a total fleet of 817 Boeing 737 aircraft; and served 121 destinations in 42 states, the District of Columbia, and the Commonwealth of Puerto Rico, as well as ten near-international countries, including Mexico, Jamaica, the Bahamas, Aruba, the Dominican Republic, Costa Rica, Belize, Cuba, the Cayman Islands, and Turks and Caicos. It also provides inflight entertainment and connectivity services on Wi-Fi enabled aircraft; and Rapid Rewards loyalty program that enables program members to earn points for dollars spent on Southwest base fares. In addition, the company offers a suite of digital platforms to support customers’ travel needs, including websites and apps; and SWABIZ, an online booking tool. Further, it provides ancillary services, such as Southwest’s EarlyBird Check-In, upgraded boarding, and transportation of pets and unaccompanied minors. Southwest Airlines Co. was incorporated in 1967 and is headquartered in Dallas, Texas.