Virgin America (NASDAQ: VA) and United Continental Holdings (NYSE:UAL) are both industrials companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, earnings, analyst recommendations, valuation, profitability, dividends and institutional ownership.

Institutional and Insider Ownership

65.6% of Virgin America shares are held by institutional investors. Comparatively, 97.7% of United Continental Holdings shares are held by institutional investors. 31.2% of Virgin America shares are held by company insiders. Comparatively, 0.3% of United Continental Holdings shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings for Virgin America and United Continental Holdings, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Virgin America 1 2 0 0 1.67
United Continental Holdings 0 13 6 0 2.32

Virgin America currently has a consensus price target of $57.00, suggesting a potential upside of 0.04%. United Continental Holdings has a consensus price target of $79.86, suggesting a potential upside of 23.88%. Given United Continental Holdings’ stronger consensus rating and higher possible upside, analysts clearly believe United Continental Holdings is more favorable than Virgin America.

Risk & Volatility

Virgin America has a beta of 1.56, suggesting that its stock price is 56% more volatile than the S&P 500. Comparatively, United Continental Holdings has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500.

Valuation and Earnings

This table compares Virgin America and United Continental Holdings’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Virgin America N/A N/A N/A $7.13 7.99
United Continental Holdings $37.38 billion 0.52 $6.37 billion $7.23 8.92

United Continental Holdings has higher revenue and earnings than Virgin America. Virgin America is trading at a lower price-to-earnings ratio than United Continental Holdings, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Virgin America and United Continental Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Virgin America 11.64% 22.78% 10.96%
United Continental Holdings 6.09% 29.46% 6.17%

Summary

United Continental Holdings beats Virgin America on 7 of the 11 factors compared between the two stocks.

Virgin America Company Profile

Virgin America Inc. is an airline that provides scheduled air travel in the United States and Mexico. The Company operates in air transportation service segment. The Company operates from Los Angeles and San Francisco with a presence at Dallas Love Field (DAL) to other destinations in North America. The Company provides service to over 20 airports in the United States and Mexico with a fleet of over 60 narrow-body aircraft. It offers three levels of service: First Class, Main Cabin Select and Main Cabin. The Company’s First Class level of service includes eight-seat cabin with an inflight teammate to provide service. Its Main Cabin Select includes approximately 40 inches of pitch for leg room. The Company’s Main Cabin includes approximately 30 inches of pitch and individual Red inflight entertainment system at every seatback. The Company maintains a guest loyalty program called the Elevate frequent flyer program.

United Continental Holdings Company Profile

United Continental Holdings, Inc. (UAL) is a holding company and its principal subsidiary is United Air Lines, Inc. (United). The Company transports people and cargo through its mainline operations. It has global air rights in North America, Asia-Pacific, Europe, Middle East, Africa and Latin America. The Company, through United and its regional carriers, operates flights from its hubs at Newark Liberty International Airport (Newark Liberty), Chicago O’Hare International Airport (Chicago O’Hare), Denver International Airport (Denver), George Bush Intercontinental Airport (Houston Bush), Los Angeles International Airport (LAX), A.B. Won Pat International Airport (Guam), San Francisco International Airport (SFO) and Washington Dulles International Airport (Washington Dulles). It has contractual relationships with regional carriers to provide regional jet and turboprop service branded as United Express. These regional operations are an extension of the Company’s mainline network.

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