Comparing Allegiant Travel (NASDAQ:ALGT) and Air Canada (NASDAQ:ACDVF)

Allegiant Travel (NASDAQ:ALGT) and Air Canada (OTCMKTS:ACDVF) are both mid-cap transportation companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, risk, earnings, dividends, valuation and profitability.

Analyst Recommendations

This is a breakdown of current ratings for Allegiant Travel and Air Canada, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Allegiant Travel 1 2 9 0 2.67
Air Canada 0 0 6 0 3.00

Allegiant Travel presently has a consensus target price of $177.33, suggesting a potential upside of 4.61%. Air Canada has a consensus target price of $53.00, suggesting a potential upside of 41.41%. Given Air Canada’s stronger consensus rating and higher probable upside, analysts clearly believe Air Canada is more favorable than Allegiant Travel.

Profitability

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

Net Margins Return on Equity Return on Assets
Allegiant Travel 11.85% 28.76% 7.95%
Air Canada 5.74% 25.91% 3.75%

Dividends

Allegiant Travel pays an annual dividend of $2.80 per share and has a dividend yield of 1.7%. Air Canada does not pay a dividend. Allegiant Travel pays out 28.0% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Allegiant Travel 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
Allegiant Travel $1.67 billion 1.66 $159.70 million $10.00 16.95
Air Canada $13.94 billion 0.71 $128.84 million N/A N/A

Allegiant Travel has higher earnings, but lower revenue than Air Canada.

Institutional and Insider Ownership

82.0% of Allegiant Travel shares are owned by institutional investors. Comparatively, 0.1% of Air Canada shares are owned by institutional investors. 20.9% of Allegiant Travel shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Allegiant Travel beats Air Canada on 10 of the 14 factors compared between the two stocks.

About Allegiant Travel

Allegiant Travel Company, a leisure travel company, provides travel services and products to residents of under-served cities in the United States. The company offers scheduled air transportation on limited-frequency, nonstop flights between under-served cities and leisure destinations. As of February 15, 2019, it operated a fleet of 79 Airbus A320 series aircraft. The company also provides air-related services and products in conjunction with air transportation, including convenience fees, baggage fees, advance seat assignments, travel protection products, change fees, priority boarding, food and beverage purchases on board, and other air-related services, as well as use of its call center for purchases. In addition, it offers third party travel products, such as hotel rooms and ground transportation, such as rental cars and hotel shuttle products; and air transportation services through fixed fee agreements and charter service on a year-round and ad-hoc basis. Further, the company leases spare engines to a third party; and offers management solutions to golf courses. Allegiant Travel Company was founded in 1997 and is based in Las Vegas, Nevada.

About Air Canada

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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