Head to Head Comparison: Controladora Vuela Compania de Aviacion (NYSE:VLRS) and Air China (OTCMKTS:AIRYY)

Air China (OTCMKTS:AIRYY) and Controladora Vuela Compania de Aviacion (NYSE:VLRS) are both transportation companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitability, valuation, risk, dividends and analyst recommendations.

Profitability

This table compares Air China and Controladora Vuela Compania de Aviacion’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Air China	-1.05%	-4.57%	-0.52%
Controladora Vuela Compania de Aviacion	-3.42%	-38.03%	-1.84%

Risk and Volatility

Air China has a beta of 0.04, indicating that its share price is 96% less volatile than the S&P 500. Comparatively, Controladora Vuela Compania de Aviacion has a beta of 1.92, indicating that its share price is 92% more volatile than the S&P 500.

Insider & Institutional Ownership

53.3% of Controladora Vuela Compania de Aviacion shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Air China and Controladora Vuela Compania de Aviacion”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Air China	$23.86 billion	0.49	-$248.70 million	($0.30)	-44.33
Controladora Vuela Compania de Aviacion	$3.04 billion	0.30	-$104.00 million	($0.89)	-8.83

Controladora Vuela Compania de Aviacion has lower revenue, but higher earnings than Air China. Air China is trading at a lower price-to-earnings ratio than Controladora Vuela Compania de Aviacion, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations for Air China and Controladora Vuela Compania de Aviacion, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Air China	1	0	0	0	1.00
Controladora Vuela Compania de Aviacion	1	6	5	0	2.33

Controladora Vuela Compania de Aviacion has a consensus price target of $8.63, indicating a potential upside of 9.91%. Given Controladora Vuela Compania de Aviacion’s stronger consensus rating and higher probable upside, analysts clearly believe Controladora Vuela Compania de Aviacion is more favorable than Air China.

Summary

Controladora Vuela Compania de Aviacion beats Air China on 7 of the 13 factors compared between the two stocks.

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.

About Controladora Vuela Compania de Aviacion

Controladora Vuela Compañía de Aviación, S.A.B. de C.V., through its subsidiary, Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V., provides air transportation services for passengers, cargo, and mail in Mexico and internationally. The company operates approximately 590 daily flights on routes connecting 43 cities in Mexico, 22 cities in the United States, 4 cities in Central America, and 2 cities in South America. As of December 31, 2022, it leased 116 aircrafts and 23 spare engines. The company also offers merchandising, travel agency, and loyalty program, as well as specialized and aeronautical technical services. Controladora Vuela Compañía de Aviación, S.A.B. de C.V. was incorporated in 2005 and is headquartered in Mexico City, Mexico.