Reviewing Deutsche Lufthansa (OTCMKTS:DLAKY) & Japan Airlines (OTCMKTS:JAPSY)

Japan Airlines (OTCMKTS:JAPSY) and Deutsche Lufthansa (OTCMKTS:DLAKY) are both transportation companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, risk, valuation, dividends and profitability.

Dividends

Japan Airlines pays an annual dividend of $0.21 per share and has a dividend yield of 2.3%. Deutsche Lufthansa pays an annual dividend of $0.22 per share and has a dividend yield of 2.4%. Japan Airlines pays out 22.1% of its earnings in the form of a dividend. Deutsche Lufthansa pays out 13.7% 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. Deutsche Lufthansa is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Japan Airlines and Deutsche Lufthansa”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Japan Airlines	$12.11 billion	0.66	$706.45 million	$0.95	9.69
Deutsche Lufthansa	$40.67 billion	0.27	$1.49 billion	$1.61	5.61

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

Risk and Volatility

Japan Airlines has a beta of 0.42, meaning that its stock price is 58% less volatile than the S&P 500. Comparatively, Deutsche Lufthansa has a beta of 1.11, meaning that its stock price is 11% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for Japan Airlines and Deutsche Lufthansa, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Japan Airlines	0	1	0	1	3.00
Deutsche Lufthansa	1	4	0	0	1.80

Profitability

This table compares Japan Airlines and Deutsche Lufthansa’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Japan Airlines	6.48%	12.66%	4.57%
Deutsche Lufthansa	4.76%	17.19%	3.86%

Summary

Deutsche Lufthansa beats Japan Airlines on 7 of the 13 factors compared between the two stocks.

About Japan Airlines

Japan Airlines Co., Ltd., together with its subsidiaries, provides scheduled and non-scheduled air transport services in Japan, Asia, Oceania, North America, and Europe. The company operates through Air Transportation and Other segments. It offers passenger, ground handling, cargo and mail handling, and maintenance services. The company is also involved in the aerial work and other related business; airport peripheral business; and sale of travel package tours. As of March 31, 2023, it operated a fleet of 224 aircraft. The company was formerly known as Japan Airlines International Co., Ltd. and changed its name to Japan Airlines Co., Ltd. in April 2011. The company was founded in 1951 and is headquartered in Tokyo, Japan.

About Deutsche Lufthansa

Deutsche Lufthansa AG operates as an aviation company worldwide. It operates in three segments: Passenger Airlines; Logistics; and Maintenance, Repair and Overhaul Services (MRO). The Passenger Airlines segment offers products and services to passengers of Lufthansa Airlines, SWISS, Austrian Airlines, Brussels Airlines, and Eurowings. Its Logistics segment offers airfreight container management, urgent shipments, and customs clearance services; and e-commerce solutions. The MRO segment provides maintenance, repair, and overhaul services for civil commercial aircraft serving original equipment manufacturers, aircraft leasing companies, operators of VIP jets, government, armed forces, and airlines. The company also offers corporate payment and billing services; vocational and professional training for cockpit and cabin crew; and IT solutions. As of December 31, 2023, it had a fleet of 721 aircraft. Deutsche Lufthansa AG was founded in 1926 and is headquartered in Cologne, Germany.