Head-To-Head Review: Japan Airlines (OTCMKTS:JAPSY) and Delta Air Lines (NYSE:DAL)

Delta Air Lines (NYSE:DAL) and Japan Airlines (OTCMKTS:JAPSY) are both transportation companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, valuation, profitability, institutional ownership, analyst recommendations, risk and dividends.

Volatility and Risk

Delta Air Lines has a beta of 1.52, indicating that its stock price is 52% more volatile than the S&P 500. Comparatively, Japan Airlines has a beta of 0.42, indicating that its stock price is 58% less volatile than the S&P 500.

Insider and Institutional Ownership

69.9% of Delta Air Lines shares are owned by institutional investors. 0.9% of Delta Air Lines shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Delta Air Lines and Japan Airlines, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Delta Air Lines	0	0	20	1	3.05
Japan Airlines	0	1	0	1	3.00

Delta Air Lines presently has a consensus target price of $71.68, indicating a potential upside of 26.05%. Given Delta Air Lines’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Delta Air Lines is more favorable than Japan Airlines.

Dividends

Delta Air Lines pays an annual dividend of $0.75 per share and has a dividend yield of 1.3%. Japan Airlines pays an annual dividend of $0.21 per share and has a dividend yield of 2.3%. Delta Air Lines pays out 10.6% of its earnings in the form of a dividend. Japan Airlines pays out 22.1% 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. Delta Air Lines has raised its dividend for 1 consecutive years.

Earnings and Valuation

This table compares Delta Air Lines and Japan Airlines”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Delta Air Lines	$62.92 billion	0.59	$3.46 billion	$7.10	8.01
Japan Airlines	$12.11 billion	0.66	$706.45 million	$0.95	9.69

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Delta Air Lines	7.36%	23.83%	5.14%
Japan Airlines	6.48%	12.66%	4.57%

Summary

Delta Air Lines beats Japan Airlines on 14 of the 17 factors compared between the two stocks.

About Delta Air Lines

Delta Air Lines, Inc. provides scheduled air transportation for passengers and cargo in the United States and internationally. The company operates through two segments, Airline and Refinery. Its domestic network centered on core hubs in Atlanta, Minneapolis-St. Paul, Detroit, and Salt Lake City, as well as coastal hub positions in Boston, Los Angeles, New York-LaGuardia, New York-JFK, and Seattle; and international network centered on hubs and market presence in Amsterdam, Bogota, Lima, Mexico City, London-Heathrow, Paris-Charles de Gaulle, Sao Paulo, Seoul-Incheon, and Tokyo. The company sells its tickets through various distribution channels, including delta.com and the Fly Delta app; acts as a reservations specialists; and operates online travel and traditional brick and mortar agencies. It also provides aircraft maintenance and engineering support, repair, and overhaul services; and vacation packages to third-party consumers. The company operates through a fleet of approximately 1,273 aircrafts. Delta Air Lines, Inc. was founded in 1924 and is based in Atlanta, Georgia.

About Japan Airlines

Japan Airlines Co., Ltd., together with its subsidiaries, provides scheduled and non-scheduled air transport services in Japan, Asia, Oceania, North America, and Europe. The company operates through Air Transportation and Other segments. It offers passenger, ground handling, cargo and mail handling, and maintenance services. The company is also involved in the aerial work and other related business; airport peripheral business; and sale of travel package tours. As of March 31, 2023, it operated a fleet of 224 aircraft. The company was formerly known as Japan Airlines International Co., Ltd. and changed its name to Japan Airlines Co., Ltd. in April 2011. The company was founded in 1951 and is headquartered in Tokyo, Japan.