Head to Head Survey: Virgin America (VA) and SkyWest (SKYW)

Virgin America (NASDAQ: VA) and SkyWest (NASDAQ:SKYW) are both industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, earnings, risk and analyst recommendations.

Profitability

This table compares Virgin America and SkyWest’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Virgin America 11.64% 22.78% 10.96%
SkyWest -4.15% 11.87% 3.18%

Analyst Ratings

This is a summary of current recommendations and price targets for Virgin America and SkyWest, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Virgin America 0 0 0 0 N/A
SkyWest 0 1 2 1 3.00

SkyWest has a consensus target price of $54.00, suggesting a potential upside of 1.41%. Given SkyWest’s higher probable upside, analysts plainly believe SkyWest is more favorable than Virgin America.

Institutional and Insider Ownership

65.6% of Virgin America shares are owned by institutional investors. Comparatively, 90.8% of SkyWest shares are owned by institutional investors. 31.2% of Virgin America shares are owned by company insiders. Comparatively, 3.5% of SkyWest shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Virgin America and SkyWest’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Virgin America N/A N/A N/A $6.68 8.53
SkyWest $3.12 billion 0.88 -$161.58 million ($2.60) -20.48

Virgin America has higher earnings, but lower revenue than SkyWest. SkyWest is trading at a lower price-to-earnings ratio than Virgin America, indicating that it is currently the more affordable of the two stocks.

Dividends

SkyWest pays an annual dividend of $0.32 per share and has a dividend yield of 0.6%. Virgin America does not pay a dividend. SkyWest pays out -12.3% of its earnings in the form of a dividend.

Summary

SkyWest beats Virgin America on 7 of the 13 factors compared between the two stocks.

About Virgin America

Virgin America Inc. is an airline that provides scheduled air travel in the United States and Mexico. The Company operates in air transportation service segment. The Company operates from Los Angeles and San Francisco with a presence at Dallas Love Field (DAL) to other destinations in North America. The Company provides service to over 20 airports in the United States and Mexico with a fleet of over 60 narrow-body aircraft. It offers three levels of service: First Class, Main Cabin Select and Main Cabin. The Company’s First Class level of service includes eight-seat cabin with an inflight teammate to provide service. Its Main Cabin Select includes approximately 40 inches of pitch for leg room. The Company’s Main Cabin includes approximately 30 inches of pitch and individual Red inflight entertainment system at every seatback. The Company maintains a guest loyalty program called the Elevate frequent flyer program.

About SkyWest

SkyWest, Inc. is the holding company for two scheduled passenger airline operations and an aircraft leasing company. SkyWest’s airline companies provide commercial air service in cities throughout North America with nearly 3,000 daily flights carrying more than 53 million passengers annually. SkyWest Airlines operates through partnerships with United Airlines, Delta Air Lines, American Airlines and Alaska Airlines. ExpressJet Airlines operates through partnerships with United Airlines, Delta Air Lines and American Airlines. Based in St. George, Utah, SkyWest employs nearly 17,000 employees.

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