Avolon (NYSE: AVOL) and Fly Leasing (NYSE:FLY) are both financials companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, valuation, profitability, dividends, earnings, institutional ownership and risk.

Profitability

This table compares Avolon and Fly Leasing’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Avolon 28.83% 14.90% 3.31%
Fly Leasing -19.77% 6.72% 1.12%

Institutional and Insider Ownership

45.0% of Fly Leasing shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings for Avolon and Fly Leasing, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Avolon 0 0 0 0 N/A
Fly Leasing 1 0 3 0 2.50

Fly Leasing has a consensus target price of $17.63, indicating a potential upside of 30.85%. Given Fly Leasing’s higher probable upside, analysts plainly believe Fly Leasing is more favorable than Avolon.

Valuation & Earnings

This table compares Avolon and Fly Leasing’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Avolon N/A N/A N/A $1.83 16.90
Fly Leasing $345.04 million 1.12 -$29.11 million ($2.16) -6.24

Avolon has higher earnings, but lower revenue than Fly Leasing. Fly Leasing is trading at a lower price-to-earnings ratio than Avolon, indicating that it is currently the more affordable of the two stocks.

Avolon Company Profile

Avolon Holdings Limited (Avolon Holdings) is a United States-based holding company, which provides aircraft leasing and lease management services. The Company operates through its wholly owned subsidiary Avolon S.a r.l. (Avolon), which is a global aircraft leasing company focused on acquiring, managing and selling commercial aircraft. Avolon’s owned, managed and committed Portfolio comprises 227 aircraft, including 122 owned, 12 managed and 93 committed aircraft. Avolon’s owned portfolio comprises primarily of narrowbody aircraft, including the Airbus A320 family and the Boeing 737-800, and select widebody aircraft, including the Airbus A330, the Boeing 777 and the Boeing 787. Avolon’s committed Portfolio includes 66 next generation Airbus A320neo, Boeing 737 MAX, Airbus A330neo and Boeing 787 family of aircraft. Avolon has a customer base of 49 customers across 27 countries across the world.

Fly Leasing Company Profile

Fly Leasing Limited is engaged in purchasing commercial aircraft, which it leases under multi-year contracts to a range of airlines throughout the world. The Company primarily acquires aircraft by entering into purchase and leaseback transactions with airlines for new aircraft; purchasing portfolios, which consists of aircraft of various types and ages, and acquiring individual aircraft. As of December 31, 2016, the Company had 76 aircraft in its portfolio, of which 75 were held for operating lease and one was recorded as an investment in finance lease. As of December 31, 2016, its portfolio included 65 narrow-body passenger aircraft (including one freighter) and 11 wide-body passenger aircraft (including two freighters). Its aircraft are leased under multi-year contracts to various group of airlines in Europe; Asia and South Pacific; Mexico, South and Central America; North America, and Middle East and Africa. Its portfolio includes aircrafts, such as B737-700 and A320-200.

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