Critical Analysis: LATAM Airlines Group (LTM) and International Consoltd Airlns Grp (ICAGY)

LATAM Airlines Group (NYSE: LTM) and International Consoltd Airlns Grp (OTCMKTS:ICAGY) are both mid-cap transportation companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, profitability and valuation.

Earnings & Valuation

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This table compares LATAM Airlines Group and International Consoltd Airlns Grp’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
LATAM Airlines Group $9.61 billion 0.99 $155.30 million $0.26 60.12
International Consoltd Airlns Grp $25.95 billion 0.27 $2.26 billion $2.32 7.48

International Consoltd Airlns Grp has higher revenue and earnings than LATAM Airlines Group. International Consoltd Airlns Grp is trading at a lower price-to-earnings ratio than LATAM Airlines Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares LATAM Airlines Group and International Consoltd Airlns Grp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
LATAM Airlines Group 1.66% 3.75% 0.84%
International Consoltd Airlns Grp 8.96% 139.43% 25.09%

Volatility and Risk

LATAM Airlines Group has a beta of 1.75, indicating that its stock price is 75% more volatile than the S&P 500. Comparatively, International Consoltd Airlns Grp has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500.

Institutional & Insider Ownership

3.1% of LATAM Airlines Group shares are held by institutional investors. Comparatively, 0.1% of International Consoltd Airlns Grp shares are held by institutional investors. 7.9% of LATAM Airlines Group shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

LATAM Airlines Group pays an annual dividend of $0.02 per share and has a dividend yield of 0.1%. International Consoltd Airlns Grp pays an annual dividend of $0.43 per share and has a dividend yield of 2.5%. LATAM Airlines Group pays out 7.7% of its earnings in the form of a dividend. International Consoltd Airlns Grp pays out 18.5% 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 Recommendations

This is a breakdown of current recommendations and price targets for LATAM Airlines Group and International Consoltd Airlns Grp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LATAM Airlines Group 3 3 0 0 1.50
International Consoltd Airlns Grp 1 4 2 0 2.14

LATAM Airlines Group currently has a consensus price target of $15.00, suggesting a potential downside of 4.03%. Given LATAM Airlines Group’s higher possible upside, research analysts plainly believe LATAM Airlines Group is more favorable than International Consoltd Airlns Grp.

Summary

International Consoltd Airlns Grp beats LATAM Airlines Group on 9 of the 16 factors compared between the two stocks.

About LATAM Airlines Group

LATAM Airlines Group SA 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 transportation segment corresponds to the route network for air transport. Its segment of Coalition and loyalty program called Multiplus is a frequent flyer programs, which operate as a unilateral system of loyalty that offers a flexible coalition system. The Company operates a fleet of over 329 aircrafts. Its passenger aircrafts include Airbus A319-100, Airbus A350-900, Boeing 767-300ER, Boeing 787-8, Boeing 787-9 and Boeing 777-300ER.

About International Consoltd Airlns Grp

International Consolidated Airlines Group, S.A. is an airline company that holds the interests in airline and ancillary operations. Its segments include British Airways, Iberia, Vueling, Aer Lingus and Other Group companies. It combines the airlines in the United Kingdom, Spain and Ireland. It has approximately 550 aircrafts to over 280 destinations. The Company operates various aircraft fleet services, including Airbus A318, Airbus A319, Airbus A340-600, Boeing 787-800, Embraer E190 and Boeing 777-200, among others. The Company, through its subsidiaries, is engaged in providing airline marketing, airline operations, insurance, aircraft maintenance, storage and custody services, air freight operations and cargo transport services. The Company offers its services in cities, including London, Madrid, Barcelona, Rome and Dublin. The Company’s brands include British Airways, Iberia, Vueling, Aer Lingus, IAG Cargo and Avios.

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