Ryanair Holdings PLC (NASDAQ: RYAAY) and Avianca Holdings (NYSE:AVH) are both transportation companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, profitability, analyst recommendations, institutional ownership and valuation.

Insider & Institutional Ownership

40.2% of Ryanair Holdings PLC shares are held by institutional investors. Comparatively, 4.2% of Avianca Holdings shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Ryanair Holdings PLC and Avianca Holdings, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ryanair Holdings PLC 3 1 4 0 2.13
Avianca Holdings 1 1 2 0 2.25

Ryanair Holdings PLC currently has a consensus price target of $96.00, suggesting a potential downside of 19.25%. Avianca Holdings has a consensus price target of $11.00, suggesting a potential upside of 43.23%. Given Avianca Holdings’ stronger consensus rating and higher possible upside, analysts plainly believe Avianca Holdings is more favorable than Ryanair Holdings PLC.

Earnings & Valuation

This table compares Ryanair Holdings PLC and Avianca Holdings’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Ryanair Holdings PLC $7.30 billion 3.88 $1.44 billion $6.79 17.51
Avianca Holdings $4.14 billion 0.15 $44.18 million $0.76 10.11

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

Profitability

This table compares Ryanair Holdings PLC and Avianca Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ryanair Holdings PLC 21.25% 32.39% 12.71%
Avianca Holdings 2.20% 13.27% 1.81%

Dividends

Avianca Holdings pays an annual dividend of $0.09 per share and has a dividend yield of 1.2%. Ryanair Holdings PLC does not pay a dividend. Avianca Holdings pays out 11.8% of its earnings in the form of a dividend.

Volatility & Risk

Ryanair Holdings PLC has a beta of 0.59, meaning that its share price is 41% less volatile than the S&P 500. Comparatively, Avianca Holdings has a beta of 0.82, meaning that its share price is 18% less volatile than the S&P 500.

Summary

Ryanair Holdings PLC beats Avianca Holdings on 11 of the 15 factors compared between the two stocks.

About Ryanair Holdings PLC

Ryanair Holdings plc (Ryanair Holdings) is a holding company for Ryanair Limited (Ryanair). Ryanair operates an ultra-low fare, scheduled-passenger airline serving short-haul, point-to-point routes between Ireland, the United Kingdom, Continental Europe, Morocco and Israel. Ryanair provides various ancillary services and engages in other activities connected with its core air passenger service, including non-flight scheduled services, Internet-related services, and the in-flight sale of beverages, food and merchandise. Ryanair markets accommodation services and travel insurance through its Website. It provides hotel and accommodation services. Ryanair provides its own aircraft and passenger handling and ticketing services at Dublin Airport. As of June 30, 2016, Ryanair had a principal fleet of over 350 Boeing 737-800 aircraft and offered over 2,000 scheduled short-haul flights per day serving approximately 200 airports throughout Europe.

About Avianca Holdings

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.

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