United Continental (NASDAQ:UAL) and Air France-KLM (OTCMKTS:AFLYY) are both transportation companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, institutional ownership, analyst recommendations, risk, valuation, dividends and profitability.
Insider & Institutional Ownership
99.9% of United Continental shares are owned by institutional investors. Comparatively, 5.3% of Air France-KLM shares are owned by institutional investors. 0.4% of United Continental shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
United Continental has a beta of 1.06, meaning that its share price is 6% more volatile than the S&P 500. Comparatively, Air France-KLM has a beta of 0.92, meaning that its share price is 8% less volatile than the S&P 500.
This table compares United Continental and Air France-KLM’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Earnings & Valuation
This table compares United Continental and Air France-KLM’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|United Continental||$41.30 billion||0.53||$2.13 billion||$9.13||9.18|
|Air France-KLM||$31.15 billion||0.13||$483.03 million||$1.06||8.75|
United Continental has higher revenue and earnings than Air France-KLM. Air France-KLM is trading at a lower price-to-earnings ratio than United Continental, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings for United Continental and Air France-KLM, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
United Continental presently has a consensus price target of $102.56, suggesting a potential upside of 22.40%. Air France-KLM has a consensus price target of $13.00, suggesting a potential upside of 40.09%. Given Air France-KLM’s higher possible upside, analysts clearly believe Air France-KLM is more favorable than United Continental.
United Continental beats Air France-KLM on 13 of the 14 factors compared between the two stocks.
About United Continental
United Continental Holdings, Inc., through its subsidiaries, provides air transportation services in North America, Asia, Europe, the Middle East, and Latin America. It transports people and cargo through its mainline and regional operations. As of December 31, 2018, the company operated a fleet of 1,329 aircraft. It also sells fuel; and offers catering, ground handling, and maintenance services for third parties. The company was formerly known as UAL Corporation and changed its name to United Continental Holdings, Inc. in October 2010. United Continental Holdings, Inc. was founded in 1934 and is headquartered in Chicago, Illinois.
About Air France-KLM
Air France-KLM SA, together with its subsidiaries, provides passenger transportation services on scheduled flights. The company operates through Network, Maintenance, Transavia, and Other segments. It also offers cargo transportation and aeronautics maintenance services; and other air-transport-related services. The company operates in France, Benelux, Europe, Africa, the Middle East, Gulf, India, the Asia-Pacific, North America, Caribbean, West Indies, French Guyana, Indian Ocean, and South America. As of December 31, 2018, it operated fleet of 548 aircraft. Air France-KLM SA was founded in 1919 and is headquartered in Paris, France.
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