Avianca (NYSE:AVH) and Air Canada (NYSE:ACDVF) Financial Analysis

Avianca (NYSE:AVH) and Air Canada (OTCMKTS:ACDVF) are both transportation companies, but which is the better business? We will compare the two companies based on the strength of their profitability, institutional ownership, valuation, risk, analyst recommendations, earnings and dividends.

Valuation & Earnings

This table compares Avianca and Air Canada’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Avianca $4.89 billion 0.07 -$24.80 million $0.91 4.63
Air Canada $13.94 billion 0.66 $128.84 million N/A N/A

Air Canada has higher revenue and earnings than Avianca.

Profitability

This table compares Avianca and Air Canada’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Avianca -9.52% -48.14% -2.13%
Air Canada 5.85% 22.87% 3.72%

Dividends

Avianca pays an annual dividend of $0.44 per share and has a dividend yield of 10.5%. Air Canada does not pay a dividend. Avianca pays out 48.4% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of recent recommendations for Avianca and Air Canada, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Avianca 1 1 0 0 1.50
Air Canada 0 1 5 0 2.83

Avianca presently has a consensus target price of $6.50, suggesting a potential upside of 54.39%. Air Canada has a consensus target price of $42.50, suggesting a potential upside of 22.61%. Given Avianca’s higher possible upside, equities research analysts plainly believe Avianca is more favorable than Air Canada.

Insider & Institutional Ownership

6.0% of Avianca shares are owned by institutional investors. Comparatively, 0.1% of Air Canada shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Air Canada beats Avianca on 10 of the 13 factors compared between the two stocks.

Avianca Company Profile

Avianca Holdings S.A., through its subsidiaries, provides passenger and cargo air transportation services in North America, Central America, the Caribbean, Colombia, Europe, South America, and internationally. It also offers aircraft maintenance, crew training, and other airport services to other carriers, as well as travel and cargo related services to its customers. In addition, the company is involved in the ground operations for third-party airlines, and aircraft leasing activities; and operates LifeMiles, a frequent flyer program. As of December 31, 2017, it operated a fleet of 186 aircraft, including 144 jet passenger aircrafts, 30 turboprop passenger aircrafts, and 12 cargo aircrafts. The company was formerly known as AviancaTaca Holding S.A. and changed its name to Avianca Holdings S.A. in March 2013. The company was founded in 1919 and is based in Panama City, Panama. Avianca Holdings S.A. is a subsidiary of Synergy Aerospace Corp.

Air Canada Company Profile

Air Canada provides domestic, U.S. transborder, and international airline services. It offers scheduled passenger services under the Air Canada Vacations and Air Canada Rouge brand name in the Canadian market, the Canada-U.S. transborder market, and in the international market to and from Canada, as well as through capacity purchase agreements on other regional carriers. As of December 31, 2018, the company operated a fleet of 184 aircraft under the Air Canada mainline brand name comprising 91 Boeing and Airbus narrow-body aircraft, 74 Boeing and Airbus wide-body aircraft, and 19 Embraer 190 regional jets; and 53 aircraft under the Air Canada Rouge brand name consisting of 22 Airbus A319 aircraft, 6 Airbus A321 aircraft, and 25 Boeing 767-300 aircraft. It also provides air cargo services in domestic and U.S. transborder routes, as well as on international routes between Canada and markets in Europe, Asia, South America, and Australia. In addition, the company operates, develops, markets, and distributes vacation travel packages in the Caribbean, Mexico, the United States, Europe, Central and South America, South Pacific, Australia, and Asia; and offers cruise packages in North America, Europe, and the Caribbean. Air Canada was founded in 1937 and is based in Saint-Laurent, Canada.

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