Head to Head Contrast: Azul (AZUL) vs. American Airlines Group (AAL)

Azul (NYSE:AZUL) and American Airlines Group (NASDAQ:AAL) are both transportation companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, analyst recommendations, earnings, risk, dividends, profitability and institutional ownership.

Profitability

This table compares Azul and American Airlines Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Azul 8.24% 24.66% 6.82%
American Airlines Group 3.75% 151.06% 4.31%

Risk and Volatility

Azul has a beta of 0.67, meaning that its stock price is 33% less volatile than the S&P 500. Comparatively, American Airlines Group has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500.

Insider and Institutional Ownership

6.8% of Azul shares are owned by institutional investors. Comparatively, 82.2% of American Airlines Group shares are owned by institutional investors. 0.7% of American Airlines Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

American Airlines Group pays an annual dividend of $0.40 per share and has a dividend yield of 1.1%. Azul does not pay a dividend. American Airlines Group pays out 8.2% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares Azul and American Airlines Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Azul $2.44 billion 2.53 $165.68 million $1.52 12.64
American Airlines Group $42.21 billion 0.40 $1.92 billion $4.88 7.47

American Airlines Group has higher revenue and earnings than Azul. American Airlines Group is trading at a lower price-to-earnings ratio than Azul, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations and price targets for Azul and American Airlines Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Azul 0 0 4 0 3.00
American Airlines Group 0 3 9 0 2.75

Azul presently has a consensus price target of $31.55, indicating a potential upside of 64.13%. American Airlines Group has a consensus price target of $54.75, indicating a potential upside of 50.25%. Given Azul’s stronger consensus rating and higher probable upside, analysts plainly believe Azul is more favorable than American Airlines Group.

Summary

American Airlines Group beats Azul on 9 of the 16 factors compared between the two stocks.

About Azul

Azul S.A. provides passenger and cargo air transportation services in Brazil. As of March 31, 2018, it operated 739 daily flights to 106 destinations through a network of 206 non-stop routes with a fleet of 120 aircraft. The company was incorporated in 2008 and is headquartered in Barueri, Brazil.

About American Airlines Group

American Airlines Group Inc., through its subsidiaries, operates as a network air carrier. It provides scheduled air transportation services for passengers and cargo. As of December 31, 2017, the company operated a mainline fleet of 948 aircraft. It serves 350 destinations in approximately 50 countries, principally from its hubs in Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, and Phoenix, as well as in Washington, D.C. The company was formerly known as AMR Corporation and changed its name to American Airlines Group Inc. in December 2013. American Airlines Group Inc. was founded in 1934 and is headquartered in Fort Worth, Texas.

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