Financial Comparison: Air China (OTCMKTS:AIRYY) vs. Alaska Air Group (NYSE:ALK)

Air China (OTCMKTS:AIRYY) and Alaska Air Group (NYSE:ALK) are both mid-cap industrials companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, earnings, valuation, institutional ownership, dividends, analyst recommendations and profitability.

Valuation & Earnings

This table compares Air China and Alaska Air Group”s gross 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	0.34	-$248.70 million	($0.39)	-23.77
Alaska Air Group	$14.24 billion	0.28	$100.00 million	($3.51)	-10.13

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

Volatility and Risk

Air China has a beta of 0.13, meaning that its share price is 87% less volatile than the S&P 500. Comparatively, Alaska Air Group has a beta of 1.33, meaning that its share price is 33% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Air China	-1.31%	-6.03%	-0.71%
Alaska Air Group	-2.58%	-5.42%	-0.98%

Analyst Recommendations

This is a breakdown of current ratings for Air China and Alaska Air Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Air China	0	1	0	0	2.00
Alaska Air Group	3	0	10	0	2.54

Alaska Air Group has a consensus target price of $53.23, suggesting a potential upside of 49.76%. Given Alaska Air Group’s stronger consensus rating and higher possible upside, analysts plainly believe Alaska Air Group is more favorable than Air China.

Insider and Institutional Ownership

81.9% of Alaska Air Group shares are owned by institutional investors. 1.0% of Alaska Air Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Alaska Air Group beats Air China on 9 of the 14 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 Alaska Air Group

Alaska Air Group, Inc., through its subsidiaries, operates airlines. It operates through three segments: Mainline, Regional, and Horizon. The company offers scheduled air transportation services on Boeing jet aircraft for passengers and cargo in the United States, and in parts of Canada, Mexico, Costa Rica, Belize, Guatemala, and the Bahamas; and for passengers across a shorter distance network within the United States, Canada, and Mexico. Alaska Air Group, Inc. was founded in 1932 and is based in Seattle, Washington.