Financial Contrast: United Continental (UAL) versus SkyWest (SKYW)

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United Continental (NASDAQ:UAL) and SkyWest (NASDAQ:SKYW) are both transportation companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, dividends, institutional ownership, risk, profitability, analyst recommendations and valuation.

Dividends

SkyWest pays an annual dividend of $0.48 per share and has a dividend yield of 0.8%. United Continental does not pay a dividend. SkyWest pays out 9.1% of its earnings in the form of a dividend. SkyWest has raised its dividend for 3 consecutive years.

Earnings & Valuation

This table compares United Continental and SkyWest’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
United Continental $41.30 billion 0.53 $2.13 billion $9.13 9.09
SkyWest $3.22 billion 0.96 $280.37 million $5.30 11.40

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

Profitability

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

Net Margins Return on Equity Return on Assets
United Continental 5.43% 28.41% 5.82%
SkyWest 9.94% 15.23% 4.73%

Analyst Recommendations

This is a summary of current recommendations and price targets for United Continental and SkyWest, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
United Continental 1 4 12 0 2.65
SkyWest 0 1 5 1 3.00

United Continental currently has a consensus price target of $102.19, indicating a potential upside of 23.16%. SkyWest has a consensus price target of $68.29, indicating a potential upside of 13.06%. Given United Continental’s higher possible upside, research analysts clearly believe United Continental is more favorable than SkyWest.

Institutional & Insider Ownership

98.1% of United Continental shares are held by institutional investors. Comparatively, 91.4% of SkyWest shares are held by institutional investors. 0.4% of United Continental shares are held by insiders. Comparatively, 3.6% of SkyWest shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

United Continental has a beta of 0.99, suggesting that its share price is 1% less volatile than the S&P 500. Comparatively, SkyWest has a beta of 1.76, suggesting that its share price is 76% more volatile than the S&P 500.

About United Continental

United Continental Holdings, Inc., through its subsidiaries, provides air transportation services in North America, Asia, Europe, the Middle East, and Latin America. It transports people and cargo through its mainline and regional operations. As of December 31, 2018, the company operated a fleet of 1,329 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 headquartered in Chicago, Illinois.

About SkyWest

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.

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