Delta Air Lines (NYSE: DAL) and Deutsche Lufthansa (OTCMKTS:DLAKY) are both large-cap transportation companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, earnings, analyst recommendations, institutional ownership, valuation, dividends and profitability.
Risk & Volatility
Delta Air Lines has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500. Comparatively, Deutsche Lufthansa has a beta of 0.59, meaning that its stock price is 41% less volatile than the S&P 500.
This table compares Delta Air Lines and Deutsche Lufthansa’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Delta Air Lines||8.67%||26.27%||6.85%|
Delta Air Lines pays an annual dividend of $1.22 per share and has a dividend yield of 2.2%. Deutsche Lufthansa pays an annual dividend of $0.39 per share and has a dividend yield of 1.2%. Delta Air Lines pays out 24.7% of its earnings in the form of a dividend. Deutsche Lufthansa pays out 8.9% 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. Delta Air Lines is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider & Institutional Ownership
87.6% of Delta Air Lines shares are owned by institutional investors. Comparatively, 0.2% of Deutsche Lufthansa shares are owned by institutional investors. 0.4% of Delta Air Lines shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
This is a summary of current ratings and recommmendations for Delta Air Lines and Deutsche Lufthansa, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Delta Air Lines||0||0||15||0||3.00|
Delta Air Lines presently has a consensus target price of $68.21, suggesting a potential upside of 24.77%. Given Delta Air Lines’ stronger consensus rating and higher probable upside, equities analysts clearly believe Delta Air Lines is more favorable than Deutsche Lufthansa.
Valuation and Earnings
This table compares Delta Air Lines and Deutsche Lufthansa’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Delta Air Lines||$41.24 billion||0.94||$3.58 billion||$4.94||11.07|
|Deutsche Lufthansa||$34.47 billion||0.44||$1.97 billion||$4.38||7.31|
Delta Air Lines has higher revenue and earnings than Deutsche Lufthansa. Deutsche Lufthansa 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.
Delta Air Lines beats Deutsche Lufthansa on 16 of the 17 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.
Deutsche Lufthansa Company Profile
Deutsche Lufthansa AG is an aviation company. The Company’s segments include; Logistics; maintenance, repair and overhaul services (MRO), Catering and Other. Its Passenger Airline Group segment includes the airlines Lufthansa Passenger Airlines, SWISS, Austrian Airlines and Eurowings. Lufthansa Cargo is the logistics services provider in the Lufthansa Group. Lufthansa Technik is an independent provider of MRO for civilian commercial aircraft. The portfolio consists of a range of different products and product combinations, from the repair of individual components to consultancy services and the supply of entire fleets. The LSG group is a provider of integrated products and services related to in-flight service. These include catering, in-flight sales and entertainment, in-flight service equipment and the associated logistics, as well as consultancy services and the operation of lounges. The Other segment consists of the service and financial companies.
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