SkyWest (SKYW) & Virgin America (NASDAQ:VA) Financial Analysis

SkyWest (NASDAQ: SKYW) and Virgin America (NASDAQ:VA) are both transportation companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, institutional ownership, dividends, valuation, analyst recommendations, profitability and risk.

Valuation and Earnings

This table compares SkyWest and Virgin America’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SkyWest $3.12 billion 0.92 -$161.58 million ($2.61) -21.15
Virgin America N/A N/A N/A $6.68 8.53

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

Insider and Institutional Ownership

90.8% of SkyWest shares are held by institutional investors. Comparatively, 65.6% of Virgin America shares are held by institutional investors. 3.5% of SkyWest shares are held by insiders. Comparatively, 31.2% of Virgin America shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares SkyWest and Virgin America’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SkyWest -4.15% 11.87% 3.18%
Virgin America 11.64% 22.78% 10.96%

Dividends

SkyWest pays an annual dividend of $0.32 per share and has a dividend yield of 0.6%. Virgin America does not pay a dividend. SkyWest pays out -12.3% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for SkyWest and Virgin America, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SkyWest 0 1 2 1 3.00
Virgin America 0 0 0 0 N/A

SkyWest presently has a consensus target price of $54.00, suggesting a potential downside of 2.17%. Given SkyWest’s higher possible upside, equities analysts clearly believe SkyWest is more favorable than Virgin America.

Summary

SkyWest beats Virgin America on 7 of the 13 factors compared between the two stocks.

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.

About Virgin America

Virgin America Inc. is an airline that provides scheduled air travel in the United States and Mexico. The Company operates in air transportation service segment. The Company operates from Los Angeles and San Francisco with a presence at Dallas Love Field (DAL) to other destinations in North America. The Company provides service to over 20 airports in the United States and Mexico with a fleet of over 60 narrow-body aircraft. It offers three levels of service: First Class, Main Cabin Select and Main Cabin. The Company’s First Class level of service includes eight-seat cabin with an inflight teammate to provide service. Its Main Cabin Select includes approximately 40 inches of pitch for leg room. The Company’s Main Cabin includes approximately 30 inches of pitch and individual Red inflight entertainment system at every seatback. The Company maintains a guest loyalty program called the Elevate frequent flyer program.

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