Financial Review: ANA (OTCMKTS:ALNPY) & American Airlines Group (NASDAQ:AAL)

ANA (OTCMKTS:ALNPY) and American Airlines Group (NASDAQ:AAL) are both mid-cap transportation companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, dividends, risk and institutional ownership.

Dividends

ANA pays an annual dividend of $0.06 per share and has a dividend yield of 1.7%. American Airlines Group pays an annual dividend of $0.40 per share and has a dividend yield of 3.4%. ANA pays out 14.3% of its earnings in the form of a dividend. American Airlines Group pays out 129.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a summary of current ratings for ANA and American Airlines Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ANA	0	2	0	0	2.00
American Airlines Group	2	9	6	0	2.24

American Airlines Group has a consensus target price of $14.69, suggesting a potential upside of 23.95%. Given American Airlines Group’s stronger consensus rating and higher probable upside, analysts clearly believe American Airlines Group is more favorable than ANA.

Insider & Institutional Ownership

52.4% of American Airlines Group shares are held by institutional investors. 0.6% of American Airlines Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares ANA and American Airlines Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ANA	$16.87 billion	0.49	$1.01 billion	$0.42	8.36
American Airlines Group	$55.99 billion	0.14	$111.00 million	$0.31	38.23

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

Volatility & Risk

ANA has a beta of 0.46, indicating that its stock price is 54% less volatile than the S&P 500. Comparatively, American Airlines Group has a beta of 1.28, indicating that its stock price is 28% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
ANA	6.65%	13.79%	4.60%
American Airlines Group	0.36%	-9.11%	0.57%

Summary

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

About ANA

ANA Holdings Inc., together with its subsidiaries, provides air transportation services in Japan and internationally. It operates through Air Transportation, Aviation-Related Business, Travel Business, and Trading Business segments. The Air Transportation segment offers regular and irregular air transport of passengers, cargo, etc. on domestic and international routes. The Aviation-Related Business segment provides services incidental to air transportation, such as airport handling and maintenance. The Travel Business develops and sells travel products, as well as plans and sells package travel products. The Trading Business imports and exports aviation-related materials, as well as sells through stores and mail-order channels. The company was formerly known as All Nippon Airways Co., Ltd. and changed its name to ANA Holdings Inc. in April 2013. ANA Holdings Inc. was incorporated in 1920 and is headquartered in Minato, Japan.

About American Airlines Group

American Airlines Group Inc., through its subsidiaries, operates as a network air carrier. The company provides scheduled air transportation services for passengers and cargo through its hubs in Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix, and Washington, D.C., as well as through partner gateways in London, Doha, Madrid, Seattle/Tacoma, Sydney, and Tokyo. It operates a mainline fleet of 965 aircraft. 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 1926 and is headquartered in Fort Worth, Texas.