Azul (NYSE:AZUL) and United Continental (NASDAQ:UAL) are both transportation companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, valuation, dividends, earnings, risk, analyst recommendations and institutional ownership.

Insider & Institutional Ownership

7.2% of Azul shares are held by institutional investors. Comparatively, 98.1% of United Continental shares are held by institutional investors. 0.3% of United Continental shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Azul and United Continental’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Azul $2.42 billion 3.47 $192.51 million $1.59 16.39
United Continental $41.30 billion 0.56 $2.13 billion $9.13 9.64

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

Volatility and Risk

Azul has a beta of -0.65, indicating that its stock price is 165% less volatile than the S&P 500. Comparatively, United Continental has a beta of 0.96, indicating that its stock price is 4% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Azul and United Continental, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Azul 0 2 2 0 2.50
United Continental 1 5 11 0 2.59

Azul currently has a consensus target price of $34.54, suggesting a potential upside of 32.52%. United Continental has a consensus target price of $101.69, suggesting a potential upside of 15.59%. Given Azul’s higher probable upside, research analysts clearly believe Azul is more favorable than United Continental.

Profitability

This table compares Azul and United Continental’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Azul 4.70% 14.15% 3.82%
United Continental 5.43% 28.41% 5.82%

Summary

United Continental beats Azul on 11 of the 14 factors compared between the two stocks.

About Azul

Azul S.A. provides passenger and cargo air transportation services in Brazil. As of March 31, 2018, it operated 739 daily flights to 106 destinations through a network of 206 non-stop routes with a fleet of 120 aircraft. The company was incorporated in 2008 and is headquartered in Barueri, Brazil.

About United Continental

United Continental Holdings, Inc., through its subsidiaries, provides air transportation services in North America, Asia, Europe, the Middle East, and Latin America. It transports people and cargo through its mainline and regional operations. As of December 31, 2018, the company operated a fleet of 1,329 aircraft. It also sells fuel; and offers catering, ground handling, and maintenance services for third parties. The company was formerly known as UAL Corporation and changed its name to United Continental Holdings, Inc. in October 2010. United Continental Holdings, Inc. was founded in 1934 and is headquartered in Chicago, Illinois.

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