Contrasting Delta Air Lines (NYSE:DAL) and American Airlines Group (NASDAQ:AAL)

Delta Air Lines (NYSE:DAL) and American Airlines Group (NASDAQ:AAL) are both industrials companies, but which is the better business? We will compare the two companies based on the strength of their dividends, analyst recommendations, profitability, earnings, risk, institutional ownership and valuation.

Earnings & Valuation

This table compares Delta Air Lines and American Airlines Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Delta Air Lines	$63.36 billion	0.90	$5.00 billion	$5.01	17.29
American Airlines Group	$54.63 billion	0.16	$111.00 million	($0.73)	-18.48

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

Analyst Ratings

This is a summary of recent ratings and target prices for Delta Air Lines and American Airlines Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Delta Air Lines	1	1	22	0	2.88
American Airlines Group	2	10	9	0	2.33

Delta Air Lines currently has a consensus price target of $99.65, suggesting a potential upside of 15.04%. American Airlines Group has a consensus price target of $17.28, suggesting a potential upside of 28.10%. Given American Airlines Group’s higher possible upside, analysts clearly believe American Airlines Group is more favorable than Delta Air Lines.

Risk and Volatility

Delta Air Lines has a beta of 1.43, suggesting that its stock price is 43% more volatile than the S&P 500. Comparatively, American Airlines Group has a beta of 1.45, suggesting that its stock price is 45% more volatile than the S&P 500.

Profitability

This table compares Delta Air Lines and American Airlines Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Delta Air Lines	4.58%	16.83%	4.26%
American Airlines Group	-0.79%	-9.11%	-0.38%

Institutional and Insider Ownership

69.9% of Delta Air Lines shares are held by institutional investors. Comparatively, 52.4% of American Airlines Group shares are held by institutional investors. 0.8% of Delta Air Lines shares are held by company insiders. Comparatively, 0.7% of American Airlines Group shares are held by company 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

Delta Air Lines beats American Airlines Group on 12 of the 14 factors compared between the two stocks.

About Delta Air Lines

Delta Air Lines is a U.S.-based airline that provides passenger and cargo transportation. It serves domestic and international destinations through its own flights and relationships with partner airlines, with major hubs including Atlanta, Detroit, Minneapolis–Saint Paul, New York, and Salt Lake City. The company offers multiple cabin and fare options, including Delta One, First Class, Delta Comfort+ and Main Cabin. Its other businesses and services include Delta Cargo, the SkyMiles loyalty program, and aircraft maintenance and repair services through Delta TechOps.

About American Airlines Group

American Airlines Group Inc. is a holding company whose principal business is operating a global airline through American Airlines and its regional partners. The company provides scheduled passenger and cargo air transportation, along with related services such as loyalty programs and travel offerings. Its network connects destinations across the United States and serves markets in the Caribbean, Latin America, Europe and the Asia-Pacific region. Regional flights are operated under the American Eagle brand by affiliated carriers.