Contrasting China Southern Airlines Company Limited (ZNH) and Gol Linhas Aereas Inteligentes (GOL)

Gol Linhas Aereas Inteligentes (NYSE: GOL) and China Southern Airlines Company Limited (NYSE:ZNH) are both mid-cap transportation companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, institutional ownership, risk, dividends, earnings, profitability and analyst recommendations.

Dividends

China Southern Airlines Company Limited pays an annual dividend of $0.64 per share and has a dividend yield of 1.7%. Gol Linhas Aereas Inteligentes does not pay a dividend. Gol Linhas Aereas Inteligentes has raised its dividend for 2 consecutive years.

Institutional and Insider Ownership

0.1% of Gol Linhas Aereas Inteligentes shares are owned by institutional investors. Comparatively, 0.5% of China Southern Airlines Company Limited shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Gol Linhas Aereas Inteligentes and China Southern Airlines Company Limited’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Gol Linhas Aereas Inteligentes $3.18 billion 0.19 $359.98 million ($1.20) -12.69
China Southern Airlines Company Limited $17.54 billion 0.41 $2.92 billion N/A N/A

China Southern Airlines Company Limited has higher revenue and earnings than Gol Linhas Aereas Inteligentes.

Analyst Recommendations

This is a summary of recent recommendations for Gol Linhas Aereas Inteligentes and China Southern Airlines Company Limited, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gol Linhas Aereas Inteligentes 0 5 2 0 2.29
China Southern Airlines Company Limited 1 0 1 0 2.00

Gol Linhas Aereas Inteligentes presently has a consensus price target of $21.83, indicating a potential upside of 44.02%. Given Gol Linhas Aereas Inteligentes’ stronger consensus rating and higher possible upside, equities analysts clearly believe Gol Linhas Aereas Inteligentes is more favorable than China Southern Airlines Company Limited.

Profitability

This table compares Gol Linhas Aereas Inteligentes and China Southern Airlines Company Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gol Linhas Aereas Inteligentes -2.70% -7.80% 3.17%
China Southern Airlines Company Limited N/A N/A N/A

Risk and Volatility

Gol Linhas Aereas Inteligentes has a beta of 2.05, indicating that its share price is 105% more volatile than the S&P 500. Comparatively, China Southern Airlines Company Limited has a beta of 1.07, indicating that its share price is 7% more volatile than the S&P 500.

Summary

China Southern Airlines Company Limited beats Gol Linhas Aereas Inteligentes on 7 of the 13 factors compared between the two stocks.

Gol Linhas Aereas Inteligentes Company Profile

Gol Linhas Aereas Inteligentes S.A. (GOL) is an airline company. The Company is engaged in providing mobile geolocation services to its passengers and designing a Website featuring accessibility resources to assist people with visual and motor impairments. The Company operates through two segments: Air transportation and Loyalty program. Air transportation segment operations originate from its subsidiary Gol Linhas Aereas S.A. (GLA) for the provision of air transportation services. Its operations also include cargo operations and excess baggage. Loyalty program segment operations are represented by the sale of mileage to air and non-air partner companies, which includes the management of the program, the sale of reward redemption rights and the creation and management of an individual and corporate database. The Company’s fleet has approximately 130 Boeing Boeing 737-700 and Boeing 737-800.

China Southern Airlines Company Limited Company Profile

China Southern Airlines Company Limited is principally engaged in the operation of civil aviation, including the provision of passenger, cargo, mail delivery and other extended transportation services. The Company operates through two business segments, including Airline Transportation segment and Other segment. Airline Transportation segment consist of passenger and cargo and mail operations. Other segment includes hotel and tour operation, ground services, cargo handling and other miscellaneous services. . The Company also provides services of general aviation and aircraft maintenance. The Company acts as an agency of domestic and foreign airlines, and other aviation and related business, such as personal accident insurance and agency business.

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