Allegiant Travel (NASDAQ: ALGT) and JetBlue Airways (NASDAQ:JBLU) are both mid-cap transportation companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, valuation, profitability, risk, analyst recommendations and dividends.

Dividends

Allegiant Travel pays an annual dividend of $2.80 per share and has a dividend yield of 2.1%. JetBlue Airways does not pay a dividend. Allegiant Travel pays out 29.3% of its earnings in the form of a dividend. Allegiant Travel has raised its dividend for 2 consecutive years.

Profitability

This table compares Allegiant Travel and JetBlue Airways’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Allegiant Travel 13.21% 30.22% 7.82%
JetBlue Airways 11.30% 10.80% 4.98%

Insider & Institutional Ownership

89.3% of Allegiant Travel shares are held by institutional investors. Comparatively, 91.3% of JetBlue Airways shares are held by institutional investors. 20.8% of Allegiant Travel shares are held by company insiders. Comparatively, 0.6% of JetBlue Airways shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Allegiant Travel and JetBlue Airways’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Allegiant Travel $1.50 billion 1.41 $194.90 million $9.55 13.70
JetBlue Airways $7.02 billion 0.82 $1.15 billion $1.71 10.79

JetBlue Airways has higher revenue and earnings than Allegiant Travel. JetBlue Airways is trading at a lower price-to-earnings ratio than Allegiant Travel, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent recommendations for Allegiant Travel and JetBlue Airways, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Allegiant Travel 1 4 6 0 2.45
JetBlue Airways 1 9 4 0 2.21

Allegiant Travel currently has a consensus price target of $149.80, indicating a potential upside of 14.53%. JetBlue Airways has a consensus price target of $22.58, indicating a potential upside of 22.37%. Given JetBlue Airways’ higher possible upside, analysts clearly believe JetBlue Airways is more favorable than Allegiant Travel.

Volatility and Risk

Allegiant Travel has a beta of 0.15, suggesting that its share price is 85% less volatile than the S&P 500. Comparatively, JetBlue Airways has a beta of 0.55, suggesting that its share price is 45% less volatile than the S&P 500.

Summary

Allegiant Travel beats JetBlue Airways on 11 of the 17 factors compared between the two stocks.

About Allegiant Travel

Allegiant Travel Company, a leisure travel company, focuses on the provision of travel services and products to residents of under-served cities in the United States. The company offers scheduled air transportation on limited frequency nonstop flights between under-served cities and leisure destinations. As of May 23, 2018, it operated a fleet of 99 Airbus aircraft. The company also provides air-related services and products in conjunction with air transportation, including convenience fees, baggage fees, advance seat assignments, travel protection products, change fees, priority boarding, food and beverage purchases on board, and other air-related services, as well as use of its call center for purchases. In addition, it offers third party travel products, such as hotel rooms, ground transportation, and attractions; and air transportation services through fixed fee agreements and charter service on a year-round and ad-hoc basis. Further, the company offers leases spare engines to a third party; and offers management solutions to golf courses. Allegiant Travel Company was founded in 1997 and is based in Las Vegas, Nevada.

About JetBlue Airways

JetBlue Airways Corporation, a passenger carrier company, provides air transportation services. As of December 31, 2017, the company operated a fleet of 53 Airbus A321 aircraft, 130 Airbus A320 aircraft, and 60 Embraer E190 aircraft. It also served 101 destinations in 30 states in the United States, the District of Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, and 21 countries in the Caribbean and Latin America. JetBlue Airways Corporation was founded in 1998 and is based in Long Island City, New York.

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