International Airlines Group (OTCMKTS: ICAGY) and Delta Air Lines (NYSE:DAL) are both transportation companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, earnings, profitability, risk, analyst recommendations and dividends.
International Airlines Group pays an annual dividend of $0.43 per share and has a dividend yield of 2.4%. Delta Air Lines pays an annual dividend of $1.22 per share and has a dividend yield of 2.2%. International Airlines Group pays out 18.5% of its earnings in the form of a dividend. Delta Air Lines pays out 24.7% 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 increased its dividend for 4 consecutive years. International Airlines Group is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares International Airlines Group and Delta Air Lines’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|International Airlines Group||$25.95 billion||0.28||$2.26 billion||$2.32||7.62|
|Delta Air Lines||$41.24 billion||0.93||$3.58 billion||$4.93||11.01|
Delta Air Lines has higher revenue and earnings than International Airlines Group. International 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.
Risk and Volatility
International Airlines Group has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500. Comparatively, Delta Air Lines has a beta of 1.08, suggesting that its share price is 8% more volatile than the S&P 500.
This is a summary of current ratings for International Airlines Group and Delta Air Lines, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|International Airlines Group||1||4||2||0||2.14|
|Delta Air Lines||0||0||16||0||3.00|
Delta Air Lines has a consensus target price of $68.27, suggesting a potential upside of 25.72%. Given Delta Air Lines’ stronger consensus rating and higher possible upside, analysts plainly believe Delta Air Lines is more favorable than International Airlines Group.
This table compares International Airlines Group and Delta Air Lines’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|International Airlines Group||8.96%||74.33%||16.76%|
|Delta Air Lines||8.37%||26.19%||6.69%|
Insider and Institutional Ownership
0.1% of International Airlines Group shares are held by institutional investors. Comparatively, 87.6% of Delta Air Lines shares are held by institutional investors. 0.4% of Delta Air Lines shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Delta Air Lines beats International Airlines Group on 12 of the 17 factors compared between the two stocks.
International Airlines Group Company Profile
International Consolidated Airlines Group, S.A., together with its subsidiaries, engages in the provision of passenger and cargo transportation services in the United Kingdom, Spain, Ireland, the United States, and rest of the world. The company operates under the British Airways, Iberia, Vueling, LEVEL, IAG Cargo, Avios, and Aer Lingus brands. As of February 12, 2018, it operated a fleet of 547 aircraft flying to 268 destinations. The company was incorporated in 2010 and is based in Madrid, Spain.
Delta Air Lines Company Profile
Delta Air Lines, Inc. provides scheduled air transportation for passengers and cargo in the United States and internationally. The company operates through two segments, Airline and Refinery. Its route network is centered on a system of hubs, international gateways, and airports in Amsterdam, Atlanta, Boston, Detroit, London-Heathrow, Los Angeles, Minneapolis-St. Paul, New York-LaGuardia, New York-JFK, Paris-Charles de Gaulle, Salt Lake City, Seattle, and Tokyo-Narita. The company sells its tickets through various distribution channels, including delta.com and mobile applications/Web, telephone reservations, online travel agencies, traditional brick and mortar, and other agencies. It also provides aircraft maintenance, repair, and overhaul services; staffing, aviation, and professional security and training services to third parties; and vacation packages to third-party consumers, as well as aircraft charters, and management and programs. As of February 9, 2018, the company operated a fleet of approximately 800 aircraft. Delta Air Lines, Inc. was founded in 1924 and is headquartered in Atlanta, Georgia.
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