Azul (NYSE: AZUL) and LATAM Airlines Group (NYSE:LTM) are both mid-cap transportation companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, institutional ownership, earnings and risk.

Dividends

LATAM Airlines Group pays an annual dividend of $0.02 per share and has a dividend yield of 0.1%. Azul does not pay a dividend. LATAM Airlines Group pays out 8.3% of its earnings in the form of a dividend.

Insider & Institutional Ownership

4.6% of Azul shares are owned by institutional investors. Comparatively, 3.2% of LATAM Airlines Group shares are owned by institutional investors. 7.8% of LATAM Airlines Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Azul and LATAM Airlines Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Azul $1.91 billion 4.74 -$36.21 million N/A N/A
LATAM Airlines Group $8.99 billion 1.13 $69.22 million $0.24 69.54

LATAM Airlines Group has higher revenue and earnings than Azul.

Profitability

This table compares Azul and LATAM Airlines Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Azul N/A N/A N/A
LATAM Airlines Group 1.51% 3.36% 0.74%

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Azul and LATAM Airlines Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Azul 0 0 5 0 3.00
LATAM Airlines Group 1 4 0 0 1.80

Azul currently has a consensus target price of $30.95, indicating a potential upside of 9.73%. LATAM Airlines Group has a consensus target price of $11.00, indicating a potential downside of 34.09%. Given Azul’s stronger consensus rating and higher probable upside, analysts clearly believe Azul is more favorable than LATAM Airlines Group.

Summary

LATAM Airlines Group beats Azul on 7 of the 13 factors compared between the two stocks.

About Azul

Azul SA is a Brazil-based company engaged in the provision of passenger transportation services. The Company primarily acts as an airline operator under the Azul brand name. The Company provides scheduled flights between numerous cities in Brazil, including Sao Paulo, Brasilia, Rio de Janeiro, Belo Horizonte, Porto Alegre, Curitiba, Manaus, Cuiaba, Fortaleza and Salvador, among others. In addition, its air network comprises international routes to the Unites States, Europe and other Latin American countries. The Company also offers Azul Cargo Express, a scheduled cargo transport service with airport-to-airport and door-to-door delivery. It owns a number of subsidiaries, such as Azul Linhas Aereas Brasileiras SA and Tudo Azul SA.

About LATAM Airlines Group

LATAM Airlines Group SA is a Chile-based company, which is engaged in passenger and cargo air transportation, both in the domestic markets of Chile, Peru, Argentina, Colombia, Ecuador and Brazil and in a developed series of regional and international routes in America, Europe and Oceania. These businesses are performed directly or through its subsidiaries in different countries. It operates through two segments: the Air transportation business and the Coalition and loyalty program Multiplus. It Air transportation segment corresponds to the route network for air transport. Its segment of Coalition and loyalty program called Multiplus is a frequent flyer programs, which operate as a unilateral system of loyalty that offers a flexible coalition system. The Company operates a fleet of over 329 aircrafts. Its passenger aircrafts include Airbus A319-100, Airbus A350-900, Boeing 767-300ER, Boeing 787-8, Boeing 787-9 and Boeing 777-300ER.

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