Head-To-Head Comparison: American Airlines Group (NASDAQ:AAL) & Saker Aviation Services (OTCMKTS:SKAS)

Saker Aviation Services (OTCMKTS:SKAS) and American Airlines Group (NASDAQ:AAL) are both transportation companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, profitability, dividends, risk, valuation, analyst recommendations and institutional ownership.

Profitability

This table compares Saker Aviation Services and American Airlines Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Saker Aviation Services	6.08%	3.44%	3.15%
American Airlines Group	1.11%	-18.14%	1.18%

Analyst Ratings

This is a summary of recent ratings and price targets for Saker Aviation Services and American Airlines Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Saker Aviation Services	0	0	0	0	0.00
American Airlines Group	2	7	9	2	2.55

American Airlines Group has a consensus target price of $16.65, suggesting a potential upside of 30.46%. Given American Airlines Group’s stronger consensus rating and higher possible upside, analysts clearly believe American Airlines Group is more favorable than Saker Aviation Services.

Earnings and Valuation

This table compares Saker Aviation Services and American Airlines Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Saker Aviation Services	$9.17 million	0.74	$1.25 million	($0.42)	-16.19
American Airlines Group	$54.29 billion	0.16	$846.00 million	$0.86	14.84

American Airlines Group has higher revenue and earnings than Saker Aviation Services. Saker Aviation Services is trading at a lower price-to-earnings ratio than American Airlines Group, indicating that it is currently the more affordable of the two stocks.

Dividends

Saker Aviation Services pays an annual dividend of $0.50 per share and has a dividend yield of 7.4%. American Airlines Group pays an annual dividend of $0.40 per share and has a dividend yield of 3.1%. Saker Aviation Services pays out -119.0% of its earnings in the form of a dividend. American Airlines Group pays out 46.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Saker Aviation Services is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

Saker Aviation Services has a beta of 0.24, indicating that its stock price is 76% less volatile than the S&P 500. Comparatively, American Airlines Group has a beta of 1.36, indicating that its stock price is 36% more volatile than the S&P 500.

Insider & Institutional Ownership

37.3% of Saker Aviation Services shares are held by institutional investors. Comparatively, 52.4% of American Airlines Group shares are held by institutional investors. 34.6% of Saker Aviation Services shares are held by company insiders. Comparatively, 0.6% of American Airlines Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

American Airlines Group beats Saker Aviation Services on 9 of the 17 factors compared between the two stocks.

About Saker Aviation Services

Saker Aviation Services, Inc., through its subsidiaries, operates in the aviation services segment of the general aviation industry in the United States. It serves as the operator of a Downtown Manhattan (New York) Heliport. The company was formerly known as FirstFlight, Inc. and changed its name to Saker Aviation Services, Inc. in September 2009. Saker Aviation Services, Inc. is headquartered in New York, New York.

About American Airlines Group

American Airlines Group Inc., through its subsidiaries, operates as a network air carrier. The company provides scheduled air transportation services for passengers and cargo through its hubs in Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix, and Washington, D.C., as well as through partner gateways in London, Doha, Madrid, Seattle/Tacoma, Sydney, and Tokyo. It operates a mainline fleet of 965 aircraft. The company was formerly known as AMR Corporation and changed its name to American Airlines Group Inc. in December 2013. American Airlines Group Inc. was founded in 1926 and is headquartered in Fort Worth, Texas.