Financial Comparison: LATAM Airlines Group (LTM) & JetBlue Airways Corporation (JBLU)

LATAM Airlines Group (NYSE: LTM) and JetBlue Airways Corporation (NASDAQ:JBLU) are both mid-cap transportation companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, institutional ownership, valuation, dividends, risk, analyst recommendations and earnings.

Volatility & Risk

LATAM Airlines Group has a beta of 1.59, indicating that its stock price is 59% more volatile than the S&P 500. Comparatively, JetBlue Airways Corporation has a beta of 0.59, indicating that its stock price is 41% less volatile than the S&P 500.

Dividends

LATAM Airlines Group pays an annual dividend of $0.02 per share and has a dividend yield of 0.2%. JetBlue Airways Corporation does not pay a dividend. LATAM Airlines Group pays out -199.8% of its earnings in the form of a dividend.

Earnings & Valuation

This table compares LATAM Airlines Group and JetBlue Airways Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
LATAM Airlines Group $9.29 billion 0.86 $1.41 billion ($0.01) -1,317.68
JetBlue Airways Corporation $6.82 billion 0.93 $1.54 billion $1.97 9.84

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

Analyst Recommendations

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LATAM Airlines Group 1 5 1 0 2.00
JetBlue Airways Corporation 1 8 5 0 2.29

LATAM Airlines Group presently has a consensus target price of $10.67, suggesting a potential downside of 19.13%. JetBlue Airways Corporation has a consensus target price of $25.27, suggesting a potential upside of 30.41%. Given JetBlue Airways Corporation’s stronger consensus rating and higher possible upside, analysts clearly believe JetBlue Airways Corporation is more favorable than LATAM Airlines Group.

Institutional & Insider Ownership

3.2% of LATAM Airlines Group shares are held by institutional investors. Comparatively, 84.5% of JetBlue Airways Corporation shares are held by institutional investors. 7.8% of LATAM Airlines Group shares are held by insiders. Comparatively, 0.6% of JetBlue Airways Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
LATAM Airlines Group -0.14% -0.16% -0.03%
JetBlue Airways Corporation 9.78% 16.75% 6.99%

Summary

JetBlue Airways Corporation beats LATAM Airlines Group on 10 of the 15 factors compared between the two stocks.

About LATAM Airlines Group

LATAM Airlines Group S.A. 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 transport segment corresponds to the route network for air transport. Its segment of loyalty coalition called Multiplus is a frequent flyer programs, which operate as a unilateral system of loyalty that offers a flexible coalition system. As of December 31, 2016, the Company operated a fleet of over 329 aircraft. Its passenger aircraft include Airbus A319-100, Airbus A350-900, Boeing 767-300ER, Boeing 787-8, Boeing 787-9 and Boeing 777-300ER.

About JetBlue Airways Corporation

JetBlue Airways Corporation is a passenger carrier company. The Company provides air transportation services across the United States, the Caribbean and Latin America. Its segments include Domestic, and Caribbean & Latin America. It operates various kinds of aircrafts, including Airbus A321, Airbus A320 and Embraer E190. It also provides premium transcontinental product called Mint. As of December 31, 2016, Mint included 16 fully lie-flat seats, four of which were in suites with a privacy door. The Company also provides Fly-Fi in-flight Internet service across its Airbus fleet. It provides its customers a choice to purchase tickets from three branded fares, which include Blue, Blue Plus and Blue Flex. Each of these fare include different offerings, such as free checked bags, reduced change fees and additional TrueBlue points. As of December 31, 2016, its Airbus A321 aircraft in a single cabin layout had 200 seats and those with Mint premium service had a seating capacity of 159 seats.

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