Head-To-Head Analysis: SkyWest (SKYW) and International Airlines Group (ICAGY)

SkyWest (NASDAQ: SKYW) and International Airlines Group (OTCMKTS:ICAGY) are both mid-cap transportation companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.

Institutional and Insider Ownership

89.2% of SkyWest shares are owned by institutional investors. Comparatively, 0.1% of International Airlines Group shares are owned by institutional investors. 3.6% of SkyWest shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.



Valuation and Earnings

This table compares SkyWest and International Airlines Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SkyWest $3.20 billion 0.95 $428.90 million $3.43 17.03
International Airlines Group $25.95 billion 0.30 $2.26 billion $5.81 3.25

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

Risk and Volatility

SkyWest has a beta of 1.7, suggesting that its stock price is 70% more volatile than the S&P 500. Comparatively, International Airlines Group has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500.

Dividends

SkyWest pays an annual dividend of $0.40 per share and has a dividend yield of 0.7%. International Airlines Group pays an annual dividend of $0.43 per share and has a dividend yield of 2.3%. SkyWest pays out 11.7% of its earnings in the form of a dividend. International Airlines Group pays out 7.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. International Airlines Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

Net Margins Return on Equity Return on Assets
SkyWest 13.92% 12.52% 3.70%
International Airlines Group 12.18% 60.24% 13.59%

Analyst Recommendations

This is a summary of current ratings and recommmendations for SkyWest and International Airlines Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SkyWest 0 0 2 1 3.33
International Airlines Group 1 4 2 0 2.14

SkyWest presently has a consensus target price of $60.75, suggesting a potential upside of 4.02%. Given SkyWest’s stronger consensus rating and higher possible upside, equities research analysts clearly believe SkyWest is more favorable than International Airlines Group.

Summary

SkyWest beats International Airlines Group on 9 of the 16 factors compared between the two stocks.

SkyWest Company Profile

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.

International Airlines Group Company Profile

International Consolidated Airlines Group, S.A., together with its subsidiaries, engages in the provision of passenger and cargo transportation services in the United Kingdom, Spain, Ireland, the United States, and rest of the world. The company operates under the British Airways, Iberia, Vueling, LEVEL, IAG Cargo, Avios, and Aer Lingus brands. As of February 12, 2018, it operated a fleet of 547 aircraft flying to 268 destinations. The company was incorporated in 2010 and is based in Madrid, Spain.

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