easyJet (OTCMKTS:EJTTF) & United Continental (OTCMKTS:UAL) Critical Review

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easyJet (OTCMKTS:EJTTF) and United Continental (NASDAQ:UAL) are both transportation companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, earnings, profitability and valuation.

Profitability

This table compares easyJet and United Continental’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
easyJet N/A N/A N/A
United Continental 6.22% 29.33% 6.03%

Risk & Volatility

easyJet has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500. Comparatively, United Continental has a beta of 1.2, indicating that its stock price is 20% more volatile than the S&P 500.

Insider & Institutional Ownership

98.2% of United Continental shares are held by institutional investors. 0.4% of United Continental shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and price targets for easyJet and United Continental, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
easyJet 3 6 4 0 2.08
United Continental 1 4 13 0 2.67

easyJet currently has a consensus target price of $557.50, suggesting a potential upside of 4,747.83%. United Continental has a consensus target price of $102.65, suggesting a potential upside of 12.37%. Given easyJet’s higher possible upside, research analysts clearly believe easyJet is more favorable than United Continental.

Earnings & Valuation

This table compares easyJet and United Continental’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
easyJet $7.93 billion 0.58 $481.58 million $1.58 7.28
United Continental $41.30 billion 0.57 $2.13 billion $9.13 10.01

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

Summary

United Continental beats easyJet on 12 of the 14 factors compared between the two stocks.

About easyJet

easyJet plc, together with its subsidiaries, operates as an airline carrier primarily in Europe. As of September 30, 2018, the company operated 979 routes and a fleet of 315 aircraft. It also engages in the trading and leasing of aircraft; and the provision of graphic design services. easyJet plc was founded in 1995 and is based in Luton, the United Kingdom.

About United Continental

United Continental Holdings, Inc., through its subsidiaries, provides air transportation services in North America, Asia, Europe, the Middle East, and Latin America. It transports people and cargo through its mainline and regional operations. As of December 31, 2018, the company operated a fleet of 1,329 aircraft. It also sells fuel; and offers catering, ground handling, and maintenance services for third parties. The company was formerly known as UAL Corporation and changed its name to United Continental Holdings, Inc. in October 2010. United Continental Holdings, Inc. was founded in 1934 and is headquartered in Chicago, Illinois.

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