Analyzing Alaska Air Group (ALK) & Its Rivals
Alaska Air Group (NYSE: ALK) is one of 31 publicly-traded companies in the “Airlines” industry, but how does it weigh in compared to its rivals? We will compare Alaska Air Group to similar businesses based on the strength of its profitability, risk, institutional ownership, analyst recommendations, valuation, dividends and earnings.
Institutional and Insider Ownership
87.7% of Alaska Air Group shares are held by institutional investors. Comparatively, 78.8% of shares of all “Airlines” companies are held by institutional investors. 0.6% of Alaska Air Group shares are held by insiders. Comparatively, 5.5% of shares of all “Airlines” companies are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Alaska Air Group pays an annual dividend of $1.20 per share and has a dividend yield of 1.5%. Alaska Air Group pays out 19.5% of its earnings in the form of a dividend. As a group, “Airlines” companies pay a dividend yield of 1.8% and pay out 33.6% of their earnings in the form of a dividend. Alaska Air Group has raised its dividend for 3 consecutive years.
This table compares Alaska Air Group and its rivals’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Alaska Air Group||11.02%||30.04%||9.14%|
|Alaska Air Group Competitors||3.83%||10.64%||3.56%|
Valuation and Earnings
This table compares Alaska Air Group and its rivals gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||EBITDA||Price/Earnings Ratio|
|Alaska Air Group||$6.94 billion||$1.84 billion||13.07|
|Alaska Air Group Competitors||$8.61 billion||$1.57 billion||-85.80|
Alaska Air Group’s rivals have higher revenue, but lower earnings than Alaska Air Group. Alaska Air Group is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.
This is a breakdown of current ratings and price targets for Alaska Air Group and its rivals, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Alaska Air Group||0||2||7||0||2.78|
|Alaska Air Group Competitors||304||1052||2158||95||2.57|
Alaska Air Group presently has a consensus price target of $100.75, indicating a potential upside of 25.12%. As a group, “Airlines” companies have a potential downside of 14.21%. Given Alaska Air Group’s stronger consensus rating and higher probable upside, research analysts clearly believe Alaska Air Group is more favorable than its rivals.
Volatility and Risk
Alaska Air Group has a beta of 0.99, indicating that its stock price is 1% less volatile than the S&P 500. Comparatively, Alaska Air Group’s rivals have a beta of 1.20, indicating that their average stock price is 20% more volatile than the S&P 500.
Alaska Air Group beats its rivals on 10 of the 15 factors compared.
Alaska Air Group Company Profile
Alaska Air Group, Inc. is the holding company of Alaska Airlines (Alaska), Virgin America Inc., Horizon Air (Horizon) and other business units. The Company operates through three segments: Mainline, Regional and Horizon. Its Mainline segment includes Alaska’s and Virgin America’s scheduled air transportation for passengers and cargo throughout the United States, and in parts of Canada, Mexico, Costa Rica and Cuba. Its Regional segment includes Horizon’s and other third-party carriers’ scheduled air transportation for passengers across a shorter distance network within the United States under capacity purchased arrangements (CPAs). Its Horizon segment includes the capacity sold to Alaska under CPA. Alaska and Virgin America operate fleets of narrowbody passenger jets. As of December 31, 2016, it maintained two frequent flyer plans: the Alaska Airlines Mileage Plan and the Virgin America Elevate.
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