Delta Air Lines (DAL) and LATAM Airlines Group (LTM) Head-To-Head Review
Delta Air Lines (NYSE: DAL) and LATAM Airlines Group (NYSE:LTM) are both mid-cap transportation companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, profitability, institutional ownership, risk, valuation, earnings and dividends.
Volatility & Risk
Delta Air Lines has a beta of 1.2, indicating that its stock price is 20% more volatile than the S&P 500. Comparatively, LATAM Airlines Group has a beta of 1.59, indicating that its stock price is 59% more volatile than the S&P 500.
Delta Air Lines pays an annual dividend of $1.22 per share and has a dividend yield of 2.6%. LATAM Airlines Group pays an annual dividend of $0.02 per share and has a dividend yield of 0.2%. Delta Air Lines pays out 24.3% of its earnings in the form of a dividend. LATAM Airlines Group pays out -199.8% 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. LATAM Airlines Group has increased its dividend for 3 consecutive years.
This table compares Delta Air Lines and LATAM Airlines Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Delta Air Lines||9.30%||28.33%||7.06%|
|LATAM Airlines Group||-0.14%||-0.16%||-0.03%|
Valuation and Earnings
This table compares Delta Air Lines and LATAM Airlines Group’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Delta Air Lines||$39.88 billion||0.85||$7.48 billion||$5.03||9.28|
|LATAM Airlines Group||$9.29 billion||0.80||$1.41 billion||($0.01)||-1,229.77|
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 current ratings for Delta Air Lines and LATAM Airlines Group, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Delta Air Lines||0||1||15||0||2.94|
|LATAM Airlines Group||1||5||1||0||2.00|
Delta Air Lines currently has a consensus target price of $62.50, suggesting a potential upside of 33.89%. LATAM Airlines Group has a consensus target price of $10.20, suggesting a potential downside of 17.14%. Given Delta Air Lines’ stronger consensus rating and higher probable upside, equities analysts plainly believe Delta Air Lines is more favorable than LATAM Airlines Group.
Institutional & Insider Ownership
87.9% of Delta Air Lines shares are held by institutional investors. Comparatively, 3.2% of LATAM Airlines Group shares are held by institutional investors. 0.4% of Delta Air Lines shares are held by company insiders. Comparatively, 7.9% of LATAM Airlines Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Delta Air Lines beats LATAM Airlines Group on 12 of the 16 factors compared between the two stocks.
Delta Air Lines Company Profile
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.
LATAM Airlines Group Company Profile
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.
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