Financial Review: Japan Airlines (JAPSY) and The Competition

Japan Airlines (OTCMKTS:JAPSY) is one of 78 publicly-traded companies in the “Passenger Airlines” industry, but how does it compare to its rivals? We will compare Japan Airlines to related businesses based on the strength of its valuation, analyst recommendations, institutional ownership, earnings, profitability, dividends and risk.

Risk and Volatility

Japan Airlines has a beta of 0.54, suggesting that its share price is 46% less volatile than the S&P 500. Comparatively, Japan Airlines’ rivals have a beta of 18.45, suggesting that their average share price is 1,745% more volatile than the S&P 500.

Valuation & Earnings

This table compares Japan Airlines and its rivals gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Japan Airlines	$13.37 billion	$860.68 million	12.06
Japan Airlines Competitors	$14.69 billion	$637.69 million	20.19

Japan Airlines’ rivals have higher revenue, but lower earnings than Japan Airlines. Japan Airlines is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares Japan Airlines and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Japan Airlines	5.15%	8.05%	3.43%
Japan Airlines Competitors	-18.03%	5.66%	1.09%

Analyst Ratings

This is a summary of recent ratings and target prices for Japan Airlines and its rivals, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Japan Airlines	0	1	0	0	2.00
Japan Airlines Competitors	1524	4060	6679	353	2.46

As a group, “Passenger Airlines” companies have a potential upside of 10.27%. Given Japan Airlines’ rivals stronger consensus rating and higher probable upside, analysts clearly believe Japan Airlines has less favorable growth aspects than its rivals.

Dividends

Japan Airlines pays an annual dividend of $0.18 per share and has a dividend yield of 1.8%. Japan Airlines pays out 21.2% of its earnings in the form of a dividend. As a group, “Passenger Airlines” companies pay a dividend yield of 1.6% and pay out 23.9% of their earnings in the form of a dividend. Japan Airlines is clearly a better dividend stock than its rivals, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

41.8% of shares of all “Passenger Airlines” companies are held by institutional investors. 10.5% of shares of all “Passenger Airlines” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

Japan Airlines rivals beat Japan Airlines on 9 of the 15 factors compared.

Japan Airlines Company Profile

Japan Airlines Co., Ltd., together with its subsidiaries, provides scheduled and non-scheduled air transport services in Japan, Asia, Oceania, North America, and Europe. The company operates through Air Transportation and Other segments. It offers passenger, ground handling, cargo and mail handling, and maintenance services. The company is also involved in the aerial work and other related business; airport peripheral business; and sale of travel package tours. As of March 31, 2023, it operated a fleet of 224 aircraft. The company was formerly known as Japan Airlines International Co., Ltd. and changed its name to Japan Airlines Co., Ltd. in April 2011. The company was founded in 1951 and is headquartered in Tokyo, Japan.