Head-To-Head Comparison: LATAM Airlines Group (LTM) vs. Delta Air Lines (DAL)
LATAM Airlines Group (NYSE: LTM) and Delta Air Lines (NYSE:DAL) are both mid-cap transportation companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, dividends, institutional ownership, valuation, analyst recommendations, profitability and earnings.
Earnings & Valuation
This table compares LATAM Airlines Group and Delta Air Lines’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|LATAM Airlines Group||$9.29 billion||0.80||$1.41 billion||($0.01)||-1,231.77|
|Delta Air Lines||$39.88 billion||0.85||$7.48 billion||$5.03||9.31|
Delta Air Lines has higher revenue and earnings than LATAM Airlines Group. LATAM Airlines Group is trading at a lower price-to-earnings ratio than Delta Air Lines, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent recommendations and price targets for LATAM Airlines Group and Delta Air Lines, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|LATAM Airlines Group||1||5||1||0||2.00|
|Delta Air Lines||0||1||15||0||2.94|
LATAM Airlines Group currently has a consensus target price of $10.20, suggesting a potential downside of 17.27%. Delta Air Lines has a consensus target price of $62.50, suggesting a potential upside of 33.46%. Given Delta Air Lines’ stronger consensus rating and higher possible upside, analysts plainly believe Delta Air Lines is more favorable than LATAM Airlines Group.
LATAM Airlines Group pays an annual dividend of $0.02 per share and has a dividend yield of 0.2%. Delta Air Lines pays an annual dividend of $1.22 per share and has a dividend yield of 2.6%. LATAM Airlines Group pays out -199.8% of its earnings in the form of a dividend. Delta Air Lines pays out 24.3% 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. Delta Air Lines has raised its dividend for 3 consecutive years. Delta Air Lines is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider & Institutional Ownership
3.2% of LATAM Airlines Group shares are owned by institutional investors. Comparatively, 86.5% of Delta Air Lines shares are owned by institutional investors. 7.9% of LATAM Airlines Group shares are owned by insiders. Comparatively, 0.4% of Delta Air Lines shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Risk & Volatility
LATAM Airlines Group has a beta of 1.59, suggesting that its share price is 59% more volatile than the S&P 500. Comparatively, Delta Air Lines has a beta of 1.2, suggesting that its share price is 20% more volatile than the S&P 500.
This table compares LATAM Airlines Group and Delta Air Lines’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|LATAM Airlines Group||-0.14%||-0.16%||-0.03%|
|Delta Air Lines||9.30%||28.33%||7.06%|
Delta Air Lines beats LATAM Airlines Group on 13 of the 16 factors compared between the two stocks.
About LATAM Airlines Group
LATAM Airlines Group S.A. is a Chile-based company, which is engaged in passenger and cargo air transportation, both in the domestic markets of Chile, Peru, Argentina, Colombia, Ecuador and Brazil and in a developed series of regional and international routes in America, Europe and Oceania. These businesses are performed directly or through its subsidiaries in different countries. It operates through two segments: the air transportation business, and the coalition and loyalty program Multiplus. It Air transport segment corresponds to the route network for air transport. Its segment of loyalty coalition called Multiplus is a frequent flyer programs, which operate as a unilateral system of loyalty that offers a flexible coalition system. As of December 31, 2016, the Company operated a fleet of over 329 aircraft. Its passenger aircraft include Airbus A319-100, Airbus A350-900, Boeing 767-300ER, Boeing 787-8, Boeing 787-9 and Boeing 777-300ER.
About Delta Air Lines
Delta Air Lines, Inc. provides scheduled air transportation for passengers and cargo throughout the United States and across the world. The Company’s segments include Airline and Refinery. The Company’s route network is centered around a system of hub, international gateway and airports that the Company operates in Amsterdam, Atlanta, Boston, Detroit, London-Heathrow, Los Angeles, Minneapolis-St. Paul, New York-LaGuardia, New York- John F Kennedy International Airport, Paris-Charles de Gaulle, Salt Lake City, Seattle and Tokyo-Narita. Each of these operations includes flights that gather and distribute traffic from markets in the geographic region surrounding the hub or gateway to domestic and international cities and to other hubs or gateways. The Company’s route network includes its international joint ventures, its alliances with other foreign airlines, its membership in SkyTeam and agreements with multiple domestic regional carriers that operate as Delta Connection.
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