LATAM Airlines Group (LTM) versus Azul (AZUL) Critical Comparison

LATAM Airlines Group (NYSE: LTM) and Azul (NYSE:AZUL) are both mid-cap industrials companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, analyst recommendations, valuation, institutional ownership and earnings.

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LATAM Airlines Group 1 5 0 0 1.83
Azul 0 0 4 0 3.00

LATAM Airlines Group presently has a consensus target price of $10.67, indicating a potential downside of 27.34%. Azul has a consensus target price of $33.00, indicating a potential upside of 32.48%. Given Azul’s stronger consensus rating and higher possible upside, analysts plainly believe Azul is more favorable than LATAM Airlines Group.

Profitability

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

Net Margins Return on Equity Return on Assets
LATAM Airlines Group 1.51% 3.36% 0.74%
Azul N/A N/A N/A

Dividends

LATAM Airlines Group pays an annual dividend of $0.02 per share and has a dividend yield of 0.1%. Azul does not pay a dividend. LATAM Airlines Group pays out 8.3% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares LATAM Airlines Group and Azul’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
LATAM Airlines Group $8.99 billion 0.99 $69.22 million $0.24 61.17
Azul $1.91 billion 4.19 -$36.21 million N/A N/A

LATAM Airlines Group has higher revenue and earnings than Azul.

Insider & Institutional Ownership

3.1% of LATAM Airlines Group shares are owned by institutional investors. Comparatively, 4.6% of Azul shares are owned by institutional investors. 7.9% of LATAM Airlines Group shares are owned by insiders. 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.

Summary

LATAM Airlines Group beats Azul on 7 of the 13 factors compared between the two stocks.

LATAM Airlines Group Company Profile

LATAM Airlines Group SA is a Chile-based company, which is engaged in passenger and cargo air transportation, both in the domestic markets of Chile, Peru, Argentina, Colombia, Ecuador and Brazil and in a developed series of regional and international routes in America, Europe and Oceania. These businesses are performed directly or through its subsidiaries in different countries. It operates through two segments: the Air transportation business and the Coalition and loyalty program Multiplus. It Air transportation segment corresponds to the route network for air transport. Its segment of Coalition and loyalty program called Multiplus is a frequent flyer programs, which operate as a unilateral system of loyalty that offers a flexible coalition system. The Company operates a fleet of over 329 aircrafts. Its passenger aircrafts include Airbus A319-100, Airbus A350-900, Boeing 767-300ER, Boeing 787-8, Boeing 787-9 and Boeing 777-300ER.

Azul Company Profile

Azul SA is a Brazil-based company engaged in the provision of passenger transportation services. The Company primarily acts as an airline operator under the Azul brand name. The Company provides scheduled flights between numerous cities in Brazil, including Sao Paulo, Brasilia, Rio de Janeiro, Belo Horizonte, Porto Alegre, Curitiba, Manaus, Cuiaba, Fortaleza and Salvador, among others. In addition, its air network comprises international routes to the Unites States, Europe and other Latin American countries. The Company also offers Azul Cargo Express, a scheduled cargo transport service with airport-to-airport and door-to-door delivery. It owns a number of subsidiaries, such as Azul Linhas Aereas Brasileiras SA and Tudo Azul SA.

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