Head-To-Head Comparison: Azul (AZUL) and United Continental (UAL)

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

Profitability

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

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

Analyst Recommendations

This is a breakdown of current ratings and price targets for Azul and United Continental, as reported by MarketBeat.com.

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

Azul currently has a consensus price target of $31.55, suggesting a potential upside of 70.05%. United Continental has a consensus price target of $86.71, suggesting a potential upside of 1.75%. Given Azul’s stronger consensus rating and higher probable upside, equities analysts plainly believe Azul is more favorable than United Continental.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Azul $2.44 billion 2.44 $165.68 million $1.52 12.20
United Continental $37.74 billion 0.62 $2.13 billion $6.76 12.61

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

Volatility and Risk

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

Institutional & Insider Ownership

4.6% of Azul shares are held by institutional investors. Comparatively, 97.4% of United Continental shares are held by institutional investors. 0.3% of United Continental shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

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

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.

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.

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