Head-To-Head Survey: American Airlines Group (NASDAQ:AAL) versus Japan Airlines (OTCMKTS:JAPSY)

Japan Airlines (OTCMKTS:JAPSY) and American Airlines Group (NASDAQ:AAL) are both mid-cap transportation companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, dividends, analyst recommendations, earnings and profitability.

Risk and Volatility

Japan Airlines has a beta of 0.3, suggesting that its share price is 70% less volatile than the S&P 500. Comparatively, American Airlines Group has a beta of 1.22, suggesting that its share price is 22% more volatile than the S&P 500.

Institutional & Insider Ownership

52.4% of American Airlines Group shares are held by institutional investors. 0.6% of American Airlines Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Japan Airlines and American Airlines Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Japan Airlines	1	0	0	1	2.50
American Airlines Group	2	9	6	0	2.24

American Airlines Group has a consensus price target of $15.47, suggesting a potential upside of 43.10%. Given American Airlines Group’s higher possible upside, analysts plainly believe American Airlines Group is more favorable than Japan Airlines.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Japan Airlines	6.57%	10.93%	4.35%
American Airlines Group	0.20%	-5.90%	0.38%

Valuation and Earnings

This table compares Japan Airlines and American Airlines Group”s gross 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	0.59	$706.45 million	$0.98	8.39
American Airlines Group	$54.63 billion	0.13	$111.00 million	$0.17	63.59

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

Summary

Japan Airlines beats American Airlines Group on 8 of the 15 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 American Airlines Group

American Airlines Group Inc., through its subsidiaries, operates as a network air carrier. The company provides scheduled air transportation services for passengers and cargo through its hubs in Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix, and Washington, D.C., as well as through partner gateways in London, Doha, Madrid, Seattle/Tacoma, Sydney, and Tokyo. It operates a mainline fleet of 965 aircraft. The company was formerly known as AMR Corporation and changed its name to American Airlines Group Inc. in December 2013. American Airlines Group Inc. was founded in 1926 and is headquartered in Fort Worth, Texas.