Contrasting Japan Airlines (OTCMKTS:JAPSY) & Ryanair (NASDAQ:RYAAY)

Japan Airlines (OTCMKTS:JAPSY) and Ryanair (NASDAQ:RYAAY) are both transportation companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, dividends, valuation, institutional ownership and earnings.

Volatility and Risk

Japan Airlines has a beta of 0.56, meaning that its share price is 44% less volatile than the S&P 500. Comparatively, Ryanair has a beta of 1.36, meaning that its share price is 36% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Japan Airlines and Ryanair, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Japan Airlines	0	0	0	0	0.00
Ryanair	0	0	6	2	3.25

Ryanair has a consensus target price of $111.50, indicating a potential upside of 70.26%. Given Ryanair’s stronger consensus rating and higher probable upside, analysts clearly believe Ryanair is more favorable than Japan Airlines.

Insider and Institutional Ownership

43.7% of Ryanair shares are held by institutional investors. 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.

Dividends

Japan Airlines pays an annual dividend of $0.21 per share and has a dividend yield of 1.9%. Ryanair pays an annual dividend of $1.00 per share and has a dividend yield of 1.5%. Japan Airlines pays out 22.8% of its earnings in the form of a dividend. Ryanair pays out 23.5% 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. Japan Airlines is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Japan Airlines and Ryanair”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Japan Airlines	$12.11 billion	0.78	$706.45 million	$0.92	11.79
Ryanair	$14.66 billion	2.37	$1.73 billion	$4.26	15.37

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

Profitability

This table compares Japan Airlines and Ryanair’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Japan Airlines	6.35%	12.28%	4.37%
Ryanair	14.42%	27.91%	12.39%

Summary

Ryanair beats Japan Airlines on 14 of the 16 factors compared between the two stocks.

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.

About Ryanair

Ryanair Holdings plc, together with its subsidiaries, provides scheduled-passenger airline services in Ireland, the United Kingdom, Italy, Spain, and internationally. It is also involved in the provision of various ancillary services, such as non-flight scheduled and Internet-related services, as well as in-flight sale of beverages, food, duty-free, and merchandise; and markets car hire, travel insurance, and accommodation services through its website and mobile app. In addition, the company offers aircraft and passenger handling, ticketing, and maintenance and repair services; and markets car parking, fast-track, airport transfers, attractions, and activities on its website and mobile app, as well as sells gift vouchers. Ryanair Holdings plc was incorporated in 1996 and is headquartered in Swords, Ireland.