LATAM Airlines Group (NYSE:LTM) vs. Air China (OTCMKTS:AIRYY) Head to Head Review

LATAM Airlines Group (NYSE:LTM) and Air China (OTCMKTS:AIRYY) are both large-cap transportation companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, valuation, profitability and risk.

Volatility and Risk

LATAM Airlines Group has a beta of 3.6, meaning that its stock price is 260% more volatile than the S&P 500. Comparatively, Air China has a beta of 0.13, meaning that its stock price is 87% less volatile than the S&P 500.

Earnings and Valuation

This table compares LATAM Airlines Group and Air China”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LATAM Airlines Group	$12.83 billion	1.03	$976.97 million	$3.89	11.30
Air China	$23.19 billion	0.50	-$32.35 million	$0.14	99.29

LATAM Airlines Group has higher earnings, but lower revenue than Air China. LATAM Airlines Group is trading at a lower price-to-earnings ratio than Air China, indicating that it is currently the more affordable of the two stocks.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
LATAM Airlines Group	8.79%	143.14%	7.44%
Air China	0.47%	2.03%	0.23%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for LATAM Airlines Group and Air China, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LATAM Airlines Group	0	2	1	0	2.33
Air China	0	0	0	0	0.00

LATAM Airlines Group currently has a consensus target price of $38.00, indicating a potential downside of 13.51%. Given LATAM Airlines Group’s stronger consensus rating and higher probable upside, equities analysts clearly believe LATAM Airlines Group is more favorable than Air China.

Summary

LATAM Airlines Group beats Air China on 10 of the 12 factors compared between the two stocks.

About LATAM Airlines Group

LATAM Airlines Group S.A., together with its subsidiaries, provides passenger and cargo air transportation services in Peru, Argentina, the United States, Europe, Colombia, Brazil, Ecuador, Chile, the Asia Pacific, and rest of Latin America. The company operates in two segments, Air Transportation; and Multiplus Coalition and Loyalty Program. It provides passenger transport services to approximately 140 destinations in 25 countries with a fleet of 322 aircrafts, well as operates loyalty programs. The company was formerly known as LAN Airlines S.A. and changed its name to LATAM Airlines Group S.A. in June 2012. LATAM Airlines Group S.A. was founded in 1929 and is based in Santiago, Chile.

About Air China

Air China Limited, together with its subsidiaries, provides air passenger, air cargo, and airline-related services in Mainland China, Hong Kong, Macau, Taiwan, China, and internationally. The company operates in Airline Operations and Other Operations segments. It provides aircraft engineering and airport ground handling services. The company is also involved in the import and export trading activities; and provision of cabin, airline catering, air ticketing, human resources, aircraft overhaul and maintenance, and financial services. Air China Limited was founded in 1988 and is headquartered in Beijing, the People's Republic of China.