Head-To-Head Review: Air China (OTCMKTS:AICAF) versus International Consolidated Airlines Group (OTCMKTS:ICAGY)

International Consolidated Airlines Group (OTCMKTS:ICAGY) and Air China (OTCMKTS:AICAF) are both industrials companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, valuation, dividends, analyst recommendations and risk.

Dividends

International Consolidated Airlines Group pays an annual dividend of $0.19 per share and has a dividend yield of 1.6%. Air China pays an annual dividend of $0.05 per share and has a dividend yield of 8.8%. International Consolidated Airlines Group pays out 5.0% of its earnings in the form of a dividend. Air China pays out 22.8% 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.

Profitability

This table compares International Consolidated Airlines Group and Air China’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
International Consolidated Airlines Group	9.21%	129.76%	23.00%
Air China	N/A	N/A	N/A

Earnings and Valuation

This table compares International Consolidated Airlines Group and Air China”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
International Consolidated Airlines Group	$37.57 billion	0.70	$3.78 billion	$3.82	3.12
Air China	N/A	N/A	N/A	$0.20	2.60

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

Institutional & Insider Ownership

0.0% of International Consolidated Airlines Group shares are held by institutional investors. Comparatively, 2.3% of Air China shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for International Consolidated Airlines Group and Air China, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
International Consolidated Airlines Group	0	1	3	0	2.75
Air China	0	0	0	0	0.00

Summary

International Consolidated Airlines Group beats Air China on 9 of the 11 factors compared between the two stocks.

About International Consolidated Airlines Group

International Consolidated Airlines Group S.A., together with its subsidiaries, engages in the provision of passenger and cargo transportation services in the United Kingdom, Spain, the United States, and rest of the world. It also provides aircraft leasing, aircraft maintenance, tour operation, air freight operations, call centre, ground handling, trustee, retail, IT, finance, procurement, storage and custody, aircraft technical assistance, human resources support, and airport infrastructure development services; and manages airline loyalty programmes. The company operates under the British Airways, Iberia, Vueling, Aer Lingus, and LEVEL brands. It operates a fleet of 582 aircrafts. The company was incorporated in 2009 and is headquartered in Harmondsworth, United Kingdom.

About Air China

Air China Limited, together with its subsidiaries, provides air passenger, air cargo, and airline-related services in Mainland China, Hong Kong, Macau, Taiwan, China, and internationally. The company operates in Airline Operations and Other Operations segments. It provides aircraft engineering and airport ground handling services. The company is also involved in the import and export trading activities; and provision of cabin, airline catering, air ticketing, human resources, aircraft overhaul and maintenance, and financial services. Air China Limited was founded in 1988 and is headquartered in Beijing, the People’s Republic of China.