China Southern Airlines Company Limited (NYSE: ZNH) and SkyWest (NASDAQ:SKYW) are both transportation companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, analyst recommendations, institutional ownership, earnings, dividends and risk.
Valuation & Earnings
This table compares China Southern Airlines Company Limited and SkyWest’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|China Southern Airlines Company Limited||$17.63 billion||0.45||$2.94 billion||N/A||N/A|
|SkyWest||$3.13 billion||0.62||$618.51 million||($2.83)||-13.25|
China Southern Airlines Company Limited has higher revenue and earnings than SkyWest.
This is a breakdown of current recommendations for China Southern Airlines Company Limited and SkyWest, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|China Southern Airlines Company Limited||1||0||1||0||2.00|
SkyWest has a consensus price target of $41.50, suggesting a potential upside of 10.67%. Given SkyWest’s stronger consensus rating and higher probable upside, analysts plainly believe SkyWest is more favorable than China Southern Airlines Company Limited.
China Southern Airlines Company Limited pays an annual dividend of $0.64 per share and has a dividend yield of 1.6%. SkyWest pays an annual dividend of $0.32 per share and has a dividend yield of 0.9%. SkyWest pays out -11.3% of its earnings in the form of a dividend. China Southern Airlines Company Limited has raised its dividend for 2 consecutive years. China Southern Airlines Company Limited is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility & Risk
China Southern Airlines Company Limited has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500. Comparatively, SkyWest has a beta of 1.68, indicating that its stock price is 68% more volatile than the S&P 500.
Institutional and Insider Ownership
0.5% of China Southern Airlines Company Limited shares are owned by institutional investors. Comparatively, 89.4% of SkyWest shares are owned by institutional investors. 3.5% of SkyWest shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
This table compares China Southern Airlines Company Limited and SkyWest’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|China Southern Airlines Company Limited||N/A||N/A||N/A|
SkyWest beats China Southern Airlines Company Limited on 11 of the 16 factors compared between the two stocks.
China Southern Airlines Company Limited Company Profile
China Southern Airlines Company Limited is principally engaged in the operation of civil aviation, including the provision of passenger, cargo, mail delivery and other extended transportation services. The Company operates through two business segments, including Airline Transportation segment and Other segment. Airline Transportation segment consist of passenger and cargo and mail operations. Other segment includes hotel and tour operation, ground services, cargo handling and other miscellaneous services. . The Company also provides services of general aviation and aircraft maintenance. The Company acts as an agency of domestic and foreign airlines, and other aviation and related business, such as personal accident insurance and agency business.
SkyWest Company Profile
SkyWest, Inc., through its subsidiaries, SkyWest Airlines, Inc. (SkyWest Airlines) and ExpressJet Airlines, Inc. (ExpressJet), operates regional airline operations in the United States. The Company’s segments include SkyWest Airlines, ExpressJet and SkyWest Leasing. The SkyWest Airlines segment provides regional jet service to airports primarily located in the Midwestern and Western United States, as well as Mexico and Canada. The ExpressJet segment provides regional jet service to airports primarily located in the Eastern and Midwestern United States, as well as Mexico, Canada and the Caribbean. The SkyWest Leasing segment includes its E175 aircraft ownership business. As of December 31, 2016, the Company offered scheduled passenger service with approximately 3,160 daily departures to destinations in the United States, Canada, Mexico and the Caribbean. The Company’s flights are operated as Delta Connection, United Express, American Eagle or Alaska Airlines.
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