Virgin America (NASDAQ: VA) and China Southern Airlines Company Limited (NYSE:ZNH) are both airlines – nec companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, profitability, earnings, risk and analyst recommendations.

Dividends

China Southern Airlines Company Limited pays an annual dividend of $0.64 per share and has a dividend yield of 1.5%. Virgin America does not pay a dividend. Virgin America has increased its dividend for 2 consecutive years.

Valuation & Earnings

This table compares Virgin America and China Southern Airlines Company Limited’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Virgin America N/A N/A N/A $6.68 8.53
China Southern Airlines Company Limited $17.31 billion 0.48 $759.12 million N/A N/A

China Southern Airlines Company Limited has higher revenue and earnings than Virgin America.

Analyst Ratings

This is a summary of recent recommendations for Virgin America and China Southern Airlines Company Limited, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Virgin America 1 1 0 0 1.50
China Southern Airlines Company Limited 1 0 0 0 1.00

Virgin America presently has a consensus price target of $57.00, indicating a potential upside of 0.00%. Given Virgin America’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Virgin America is more favorable than China Southern Airlines Company Limited.

Profitability

This table compares Virgin America and China Southern Airlines Company Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Virgin America 11.64% 22.78% 10.96%
China Southern Airlines Company Limited 5.31% 12.45% 3.17%

Institutional & Insider Ownership

65.6% of Virgin America shares are held by institutional investors. Comparatively, 0.5% of China Southern Airlines Company Limited shares are held by institutional investors. 31.2% of Virgin America 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.

Summary

Virgin America beats China Southern Airlines Company Limited on 8 of the 10 factors compared between the two stocks.

Virgin America Company Profile

Virgin America Inc. is an airline that provides scheduled air travel in the United States and Mexico. The Company operates in air transportation service segment. The Company operates from Los Angeles and San Francisco with a presence at Dallas Love Field (DAL) to other destinations in North America. The Company provides service to over 20 airports in the United States and Mexico with a fleet of over 60 narrow-body aircraft. It offers three levels of service: First Class, Main Cabin Select and Main Cabin. The Company’s First Class level of service includes eight-seat cabin with an inflight teammate to provide service. Its Main Cabin Select includes approximately 40 inches of pitch for leg room. The Company’s Main Cabin includes approximately 30 inches of pitch and individual Red inflight entertainment system at every seatback. The Company maintains a guest loyalty program called the Elevate frequent flyer program.

China Southern Airlines Company Limited Company Profile

China Southern Airlines Company Limited is principally engaged in the operation of civil aviation, including the provision of passenger, cargo, mail delivery and other extended transportation services. The Company operates through two business segments, including Airline Transportation segment and Other segment. Airline Transportation segment consist of passenger and cargo and mail operations. Other segment includes hotel and tour operation, ground services, cargo handling and other miscellaneous services. . The Company also provides services of general aviation and aircraft maintenance. The Company acts as an agency of domestic and foreign airlines, and other aviation and related business, such as personal accident insurance and agency business.

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