Analyzing Fly Leasing (FLY) & Avolon (AVOL)

Fly Leasing (NYSE: FLY) and Avolon (NYSE:AVOL) are both transportation companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, earnings, valuation, risk, analyst recommendations, profitability and institutional ownership.

Earnings and Valuation

This table compares Fly Leasing and Avolon’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Fly Leasing $345.04 million 1.15 -$29.11 million ($2.16) -6.42
Avolon N/A N/A N/A $1.83 16.90

Avolon has lower revenue, but higher earnings than Fly Leasing. Fly Leasing is trading at a lower price-to-earnings ratio than Avolon, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Fly Leasing and Avolon’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fly Leasing -19.77% 6.72% 1.12%
Avolon 28.83% 14.90% 3.31%

Institutional & Insider Ownership

45.0% of Fly Leasing shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and price targets for Fly Leasing and Avolon, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fly Leasing 0 0 3 0 3.00
Avolon 0 0 0 0 N/A

Fly Leasing currently has a consensus target price of $19.00, indicating a potential upside of 36.99%. Given Fly Leasing’s higher probable upside, equities analysts plainly believe Fly Leasing is more favorable than Avolon.

About Fly Leasing

Fly Leasing Limited is engaged in purchasing commercial aircraft, which it leases under multi-year contracts to a range of airlines throughout the world. The Company primarily acquires aircraft by entering into purchase and leaseback transactions with airlines for new aircraft; purchasing portfolios, which consists of aircraft of various types and ages, and acquiring individual aircraft. As of December 31, 2016, the Company had 76 aircraft in its portfolio, of which 75 were held for operating lease and one was recorded as an investment in finance lease. As of December 31, 2016, its portfolio included 65 narrow-body passenger aircraft (including one freighter) and 11 wide-body passenger aircraft (including two freighters). Its aircraft are leased under multi-year contracts to various group of airlines in Europe; Asia and South Pacific; Mexico, South and Central America; North America, and Middle East and Africa. Its portfolio includes aircrafts, such as B737-700 and A320-200.

About Avolon

Avolon Holdings Limited (Avolon Holdings) is a United States-based holding company, which provides aircraft leasing and lease management services. The Company operates through its wholly owned subsidiary Avolon S.a r.l. (Avolon), which is a global aircraft leasing company focused on acquiring, managing and selling commercial aircraft. Avolon’s owned, managed and committed Portfolio comprises 227 aircraft, including 122 owned, 12 managed and 93 committed aircraft. Avolon’s owned portfolio comprises primarily of narrowbody aircraft, including the Airbus A320 family and the Boeing 737-800, and select widebody aircraft, including the Airbus A330, the Boeing 777 and the Boeing 787. Avolon’s committed Portfolio includes 66 next generation Airbus A320neo, Boeing 737 MAX, Airbus A330neo and Boeing 787 family of aircraft. Avolon has a customer base of 49 customers across 27 countries across the world.

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