Avianca Holdings (NYSE: AVH) and Delta Air Lines (NYSE:DAL) are both transportation companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, risk, dividends and earnings.

Analyst Ratings

This is a summary of current recommendations for Avianca Holdings and Delta Air Lines, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Avianca Holdings 1 3 0 0 1.75
Delta Air Lines 0 1 15 0 2.94

Avianca Holdings currently has a consensus target price of $9.00, suggesting a potential upside of 19.68%. Delta Air Lines has a consensus target price of $62.50, suggesting a potential upside of 33.89%. Given Delta Air Lines’ stronger consensus rating and higher possible upside, analysts plainly believe Delta Air Lines is more favorable than Avianca Holdings.

Valuation & Earnings

This table compares Avianca Holdings and Delta Air Lines’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Avianca Holdings $4.33 billion 0.22 $555.92 million $0.76 9.89
Delta Air Lines $39.88 billion 0.85 $7.48 billion $5.03 9.28

Delta Air Lines has higher revenue and earnings than Avianca Holdings. Delta Air Lines is trading at a lower price-to-earnings ratio than Avianca Holdings, indicating that it is currently the more affordable of the two stocks.

Dividends

Avianca Holdings pays an annual dividend of $0.09 per share and has a dividend yield of 1.2%. Delta Air Lines pays an annual dividend of $1.22 per share and has a dividend yield of 2.6%. Avianca Holdings pays out 11.8% of its earnings in the form of a dividend. Delta Air Lines pays out 24.3% 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. Avianca Holdings has increased its dividend for 3 consecutive years.

Volatility and Risk

Avianca Holdings has a beta of 0.87, meaning that its stock price is 13% less volatile than the S&P 500. Comparatively, Delta Air Lines has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500.

Profitability

This table compares Avianca Holdings and Delta Air Lines’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Avianca Holdings 2.20% 13.27% 1.81%
Delta Air Lines 9.30% 28.33% 7.06%

Institutional & Insider Ownership

2.8% of Avianca Holdings shares are owned by institutional investors. Comparatively, 86.5% of Delta Air Lines 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, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Delta Air Lines beats Avianca Holdings on 15 of the 17 factors compared between the two stocks.

Avianca Holdings Company Profile

Avianca Holdings SA is a Panama-based company engaged, through its subsidiaries, in the provision of air transportation services for passengers and commercial purposes. The Company was originally established as a strategic alliance between Aerovias del Continente Americano SA (AVIANCA) and Grupo TACA Holdings Limited (GTH), and it mainly operates in North, Central and South America, the Caribbean and Europe. In addition, through codeshare agreements, the Company is active in the operation of other international passenger air routes. As of December 31, 2011, the Company owned such subsidiaries as Latin Airways Corporation and LifeMiles Corporation, among others. On December 28, 2012, the merger of subsidiaries Latin Airways Corporation, as absorbing company, with Synergy Ocean Air Colombia SAS and Soac 2 SAS was formalized. On June 18, 2013, the Company received the first out of 15 ATR 72-600, a turbo-propelled aircraft from ATR, a company engaged in regional aircraft.

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.

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