Copa (NYSE: CPA) and Virgin America (NASDAQ:VA) are both transportation companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, risk, earnings, institutional ownership, analyst recommendations and valuation.

Dividends

Copa pays an annual dividend of $3.00 per share and has a dividend yield of 2.2%. Virgin America does not pay a dividend. Copa pays out 34.8% of its earnings in the form of a dividend.

Institutional & Insider Ownership

61.7% of Copa shares are held by institutional investors. Comparatively, 65.6% of Virgin America shares are held by institutional investors. 31.2% of Virgin America shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for Copa and Virgin America, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Copa 0 5 3 0 2.38
Virgin America 0 0 0 0 N/A

Copa presently has a consensus price target of $132.67, suggesting a potential downside of 0.61%. Given Copa’s higher possible upside, equities analysts plainly believe Copa is more favorable than Virgin America.

Valuation & Earnings

This table compares Copa and Virgin America’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Copa $2.22 billion 2.69 $334.54 million $8.61 15.50
Virgin America N/A N/A N/A $6.68 8.53

Copa has higher revenue and earnings than Virgin America. Virgin America is trading at a lower price-to-earnings ratio than Copa, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Copa and Virgin America’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Copa 14.88% 16.81% 8.14%
Virgin America 11.64% 22.78% 10.96%

Summary

Copa beats Virgin America on 6 of the 11 factors compared between the two stocks.

Copa Company Profile

Copa Holdings, S.A. is a provider of airline passenger and cargo service through its principal operating subsidiaries, Compania Panamena de Aviacion, S. A. (Copa Airlines) and AeroRepublica, S. A. (Copa Colombia). The Company operates through air transportation segment. Copa Airlines operates from its position located in the Republic of Panama. Copa Airlines provides international air transportation for passengers, cargo and mail, operating from its Panama City hub in the Republic of Panama. Copa Colombia provides service within Colombia and international flights from various cities in Colombia to Panama, Venezuela, Ecuador, Mexico, Cuba, Guatemala and Costa Rica. Copa Colombia provides domestic and international air transportation for passengers, cargo and mail with a point-to-point route network. Its subsidiary, Oval Financial Leasing, Ltd., controls the special purpose entities that have a beneficial interest in the majority of its fleet.

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.

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