Reviewing Air China (AICAF) & The Competition

Institutional & Insider Ownership

2.3% of Air China shares are owned by institutional investors. Comparatively, 41.7% of shares of all “Passenger Airlines” companies are owned by institutional investors. 10.5% of shares of all “Passenger Airlines” companies are owned by 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 and Valuation

This table compares Air China and its competitors gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Air China	N/A	N/A	2.60
Air China Competitors	$14.59 billion	$623.26 million	13.89

Air China’s competitors have higher revenue and earnings than Air China. Air China is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Dividends

Air China pays an annual dividend of $0.05 per share and has a dividend yield of 8.8%. Air China pays out 22.8% of its earnings in the form of a dividend. As a group, “Passenger Airlines” companies pay a dividend yield of 1.6% and pay out 23.2% of their earnings in the form of a dividend. Air China is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.

Profitability

This table compares Air China and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Air China	N/A	N/A	N/A
Air China Competitors	-30.14%	9.98%	0.35%

Summary

Air China competitors beat Air China on 6 of the 9 factors compared.

About Air China

Air China Limited, together with its subsidiaries, provides air passenger, air cargo, and airline-related services in Mainland China, Hong Kong, Macau, Taiwan, China, and internationally. The company operates in Airline Operations and Other Operations segments. It provides aircraft engineering and airport ground handling services. The company is also involved in the import and export trading activities; and provision of cabin, airline catering, air ticketing, human resources, aircraft overhaul and maintenance, and financial services. Air China Limited was founded in 1988 and is headquartered in Beijing, the People’s Republic of China.