Analyzing United Continental (UAL) & Azul (AZUL)

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United Continental (NYSE: AZUL) and Azul (NYSE:AZUL) are both transportation companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, analyst recommendations, dividends, institutional ownership, earnings, valuation and profitability.

Profitability

This table compares United Continental and Azul’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
United Continental 5.23% 24.28% 4.86%
Azul 8.24% 24.66% 6.82%

Volatility & Risk

United Continental has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500. Comparatively, Azul has a beta of 1.1, indicating that its share price is 10% more volatile than the S&P 500.

Valuation and Earnings

This table compares United Continental and Azul’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
United Continental $37.74 billion 0.59 $2.13 billion $6.76 12.13
Azul $2.44 billion 2.47 $165.68 million $1.52 12.32

United Continental has higher revenue and earnings than Azul. United Continental is trading at a lower price-to-earnings ratio than Azul, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

97.4% of United Continental shares are owned by institutional investors. Comparatively, 4.4% of Azul shares are owned by institutional investors. 0.3% of United Continental shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations for United Continental and Azul, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
United Continental 0 8 8 1 2.59
Azul 0 0 4 0 3.00

United Continental presently has a consensus price target of $87.27, suggesting a potential upside of 6.41%. Azul has a consensus price target of $31.55, suggesting a potential upside of 68.42%. Given Azul’s stronger consensus rating and higher probable upside, analysts plainly believe Azul is more favorable than United Continental.

Summary

Azul beats United Continental on 8 of the 15 factors compared between the two stocks.

United Continental Company Profile

United Continental Holdings, Inc., together with its subsidiaries, provides air transportation services in North America, the Asia-Pacific, Europe, the Middle East, Africa, and Latin America. It transports people and cargo through its mainline and regional operations. As of December 31, 2017, the company operated a fleet of 1,262 aircraft. It also sells fuel; and offers catering, ground handling, and maintenance services for third parties. The company was formerly known as UAL Corporation and changed its name to United Continental Holdings, Inc. in October 2010. United Continental Holdings, Inc. was founded in 1934 and is based in Chicago, Illinois.

Azul Company Profile

Azul S.A. provides passenger and cargo air transportation services in Brazil. As of March 31, 2018, it operated 739 daily flights to 106 destinations through a network of 206 non-stop routes with a fleet of 120 aircraft. The company was incorporated in 2008 and is headquartered in Barueri, Brazil.

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