Comparing American Airlines Group (AAL) and Its Rivals

American Airlines Group (NASDAQ: AAL) is one of 24 public companies in the “Air transportation, scheduled” industry, but how does it contrast to its peers? We will compare American Airlines Group to similar businesses based on the strength of its valuation, dividends, institutional ownership, earnings, risk, profitability and analyst recommendations.

Dividends

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American Airlines Group pays an annual dividend of $0.40 per share and has a dividend yield of 0.8%. American Airlines Group pays out 8.2% of its earnings in the form of a dividend. As a group, “Air transportation, scheduled” companies pay a dividend yield of 1.6% and pay out 20.5% of their earnings in the form of a dividend.

Analyst Ratings

This is a summary of recent ratings and target prices for American Airlines Group and its peers, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Airlines Group 1 4 10 0 2.60
American Airlines Group Competitors 313 1126 1711 143 2.51

American Airlines Group presently has a consensus price target of $62.40, suggesting a potential upside of 24.08%. As a group, “Air transportation, scheduled” companies have a potential upside of 10.01%. Given American Airlines Group’s stronger consensus rating and higher probable upside, research analysts clearly believe American Airlines Group is more favorable than its peers.

Volatility & Risk

American Airlines Group has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500. Comparatively, American Airlines Group’s peers have a beta of 1.16, suggesting that their average share price is 16% more volatile than the S&P 500.

Insider and Institutional Ownership

80.5% of American Airlines Group shares are owned by institutional investors. Comparatively, 79.5% of shares of all “Air transportation, scheduled” companies are owned by institutional investors. 0.6% of American Airlines Group shares are owned by company insiders. Comparatively, 3.7% of shares of all “Air transportation, scheduled” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares American Airlines Group and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Airlines Group 4.55% 63.78% 4.57%
American Airlines Group Competitors 8.39% 27.20% 6.31%

Valuation & Earnings

This table compares American Airlines Group and its peers revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
American Airlines Group $42.21 billion $1.92 billion 10.31
American Airlines Group Competitors $15.00 billion $962.69 million 9.73

American Airlines Group has higher revenue and earnings than its peers. American Airlines Group is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Summary

American Airlines Group beats its peers on 9 of the 15 factors compared.

About American Airlines Group

American Airlines Group Inc. is a holding company. The Company’s primary business activity is the operation of a network air carrier, providing scheduled air transportation for passengers and cargo. The Company operates through American segment, which provides air transportation for passengers and cargo. The Company’s cargo division provides a range of freight and mail services with facilities and interline connections available across the globe. Together with its regional airline subsidiaries and third-party regional carriers operating as American Eagle, its airline operated an average of nearly 6,700 flights per day to nearly 350 destinations in more than 50 countries, principally from its hubs in Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix and Washington, District of Columbia, as of December 31, 2016. In the fiscal year ended December 31, 2016, approximately 199 million passengers boarded its mainline and regional flights.

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