Sifting through countless of stocks in the Airlines industry can be tedious, and sometimes two stocks are just too similar to judge which is the better investment. If you’re on the fence about investing in Alaska Air Group, Inc. or LATAM Airlines Group SA (ADR) because you’re not sure how they measure up, it’s important to compare them on a few factors before making your decision.
Read on to learn how Alaska Air Group, Inc. and LATAM Airlines Group SA (ADR) compare based on key financial metrics to determine which better meets your investment needs.
About Alaska Air Group, Inc. and LATAM Airlines Group SA (ADR)
Alaska Air Group, Inc. is engaged in operating airlines. The Company operates two airlines, Alaska, and Horizon. It also includes McGee Air Services, an aviation services provider. It operates through three segments: Mainline, Regional and Horizon. The Mainline segment includes scheduled air transportation on Alaska’s Boeing 737 (B737) aircraft for passengers and cargo throughout the United States, and in parts of Mexico, Costa Rica, Belize, the Bahamas, and Guatemala. The Regional segment includes Horizon’s and other third-party carriers scheduled air transportation on Embraer E175 (E175) aircraft for passengers across a shorter distance network within the United States, Canada, and Mexico under capacity purchase agreements (CPA). The Horizon segment includes the capacity sold to Alaska under a CPA. With its regional partners, it flies to more than 120 destinations throughout North America. It provides its guests with global access to more than 900 destinations in 170 territories.
LATAM Airlines Group SA is a Chile-based company, which is engaged in passenger and cargo air transportation, both in the domestic markets of Chile, Peru, Argentina, Colombia, Ecuador and Brazil and in a developed series of regional and international routes in America, Europe and Oceania. These businesses are performed directly or through its subsidiaries in different countries. It operates through two segments: the Air transportation business and the Coalition and loyalty program Multiplus. It Air transportation segment corresponds to the route network for air transport. Its segment of Coalition and loyalty program called Multiplus is a frequent flyer programs, which operate as a unilateral system of loyalty that offers a flexible coalition system. The Company operates a fleet of over 329 aircrafts. Its passenger aircrafts include Airbus A319-100, Airbus A350-900, Boeing 767-300ER, Boeing 787-8, Boeing 787-9 and Boeing 777-300ER.
Latest Airlines and Alaska Air Group, Inc., LATAM Airlines Group SA (ADR) Stock News
As of August 23, 2024, Alaska Air Group, Inc. had a $4.4 billion market capitalization, compared to the Airlines median of $1.1 million. Alaska Air Group, Inc.’s stock is NA in 2024, NA in the previous five trading days and down 16.25% in the past year.
Currently, Alaska Air Group, Inc.’s price-earnings ratio is 20.7. Alaska Air Group, Inc.’s trailing 12-month revenue is $10.5 billion with a 2.1% net profit margin. Year-over-year quarterly sales growth most recently was 2.1%. Analysts expect adjusted earnings to reach $3.977 per share for the current fiscal year. Alaska Air Group, Inc. does not currently pay a dividend.
Currently, LATAM Airlines Group SA (ADR) does not have a price-earnings ratio. LATAM Airlines Group SA (ADR)’s trailing 12-month revenue is $12.5 billion with a 5.8% net profit margin. Year-over-year quarterly sales growth most recently was 13.3%. Analysts expect adjusted earnings to reach $2.275 per share for the current fiscal year. LATAM Airlines Group SA (ADR) does not currently pay a dividend.
How We Compare Alaska Air Group, Inc. and LATAM Airlines Group SA (ADR) Stock Grades
Stock evaluation requires access to huge amounts of data and the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movements. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors streamline and work through such data.
AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A‐F grades for each of five key investing factors: value, growth, momentum, earnings estimate revisions and quality. Here, we’ll take a closer look at Alaska Air Group, Inc. and LATAM Airlines Group SA (ADR)’s stock grades to see how they measure up against one another.
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Alaska Air Group, Inc. and LATAM Airlines Group SA (ADR) Growth Grades
Company
Ticker
Growth
Alaska Air Group, Inc.
ALK
B
LATAM Airlines Group SA (ADR)
LTM
B
The foundation of growth investing is seeking out stocks of companies exhibiting strong, consistent and prolonged growth that is expected to continue into the future.
In order to compute the growth score and assign it a letter grade, the percentile ranks for each of three components‐consistency of annual sales growth, five-year sales growth rankings adjusted for extreme levels, and consistency of positive annual cash from operations‐must be determined. These three rank figures are added together, and the sum is ranked against the entire stock universe to arrive at a company’s Growth Score to create an equal distribution of grades.
The companies in the bottom 20% of the stock universe receive Growth Grades of F, considered to be very weak, while those in the top 20% receive A grades, which are considered very strong.
Alaska Air Group, Inc. has a Growth Score of 71, which is Strong.
LATAM Airlines Group SA (ADR) has a Growth Score of 68, which is Strong.
The Growth Grade Winner: It’s a Tie!
Looking at the Growth Grade breakdown above, both Alaska Air Group, Inc. and LATAM Airlines Group SA (ADR) have a grade of B. For investors who focus solely on a company’s upward growth, further research should be conducted into both companies’ other financial metrics before deciding whether to invest.
Alaska Air Group, Inc. and LATAM Airlines Group SA (ADR)’s Quality Grades
Company
Ticker
Quality
Alaska Air Group, Inc.
ALK
B
LATAM Airlines Group SA (ADR)
LTM
B
Like the Value Grade, AAII’s A+ Investor Quality Grade comes from the percentile rank of key metrics. Specifically, the Quality Score is the percentile rank of the average of the percentile ranks of return on assets (ROA), return on invested capital (ROIC), gross profit relative to assets, buyback yield, change in total liabilities to assets, accruals, Z double prime bankruptcy risk (Z) score and the F-Score.
The score is variable, meaning it can consider all eight measures or, should any of the eight measures not be valid, the remaining measures that are valid. To be assigned a Quality Score, stocks must have a valid (non-null) measure and corresponding ranking for at least four of the eight quality measures.
The Quality Score is used to assess the underlying “quality” of a particular stock. A higher-quality stock possesses traits associated with upside potential and reduced downside risk. Backtesting of the Quality Grade shows that stocks with higher grades, on average, outperformed stocks with lower grades over the period of 1998 through 2019.
Stocks receive better grades (higher scores) for having higher scores for the quality subcomponents and worse grades (lower scores) for lower scores for the subcomponents.
Alaska Air Group, Inc. has a Quality Score of 71, which is Strong.
LATAM Airlines Group SA (ADR) has a Quality Score of 61, which is Strong.
The Quality Grade Winner: It’s a Tie!
Looking at the Quality Grade breakdown above, both Alaska Air Group, Inc. and LATAM Airlines Group SA (ADR) have a grade of B. For investors who focus solely on a company’s overall quality, you will need to conduct further research into both companies to see if they are a good fit for your portfolio. As a good rule of thumb, you should always analyze multiple factors based on a wide range of metrics before choosing a company to invest in.
Alaska Air Group, Inc. and LATAM Airlines Group SA (ADR)’s Momentum Grades
Company
Ticker
Momentum
Alaska Air Group, Inc.
ALK
D
LATAM Airlines Group SA (ADR)
LTM
F
Momentum grades help to uncover stocks experiencing anomalously high rates of return; research finds that stocks with high relative levels of momentum tend to outperform, whereas those with low levels of momentum tend to continue underperforming. Momentum is based on the price change of a stock over a specified period relative to all other stocks.
Typically, AAII looks at the weighted relative strength over the trailing four quarters. The weighted four-quarter relative strength rank is the relative price change for each of the past four quarters. The most recent quarterly price change is given a weight of 40% and each of the three previous quarters are given a weighting of 20%.
Alaska Air Group, Inc. has a Momentum Score of 29, which is Weak.
LATAM Airlines Group SA (ADR) has a Momentum Score of 5, which is Very Weak.
The Momentum Stock Winner: No Clear Winner
Neither Alaska Air Group, Inc. or LATAM Airlines Group SA (ADR) has a strong enough Momentum Grade to be considered a “winner.” Investors considering these companies should do additional due diligence and research to see if either could be a good addition to their portfolios. It’s important to look at a wide range of financial metrics in order to determine if Alaska Air Group, Inc. or LATAM Airlines Group SA (ADR) is the better investment when it comes to momentum.
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Other Alaska Air Group, Inc. and LATAM Airlines Group SA (ADR) Grades
In addition to Growth, Momentum and Quality, A+ Investor also provides grades for Value and Estimate Revisions.
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AAII’s expansive and robust screening tools like A+ Investor help investors make confident decisions.
Earnings estimate revisions scores take into account the magnitude of a company’s earnings surprise in its last two reported fiscal quarters. Often, surprises beget further surprises‐or at least continued sales growth (the exact opposite is generally true, too).
Successful stock investing involves buying low and selling high, so stock valuation is an important consideration for stock selection. Buying stocks that are going to go up typically means buying stocks that are undervalued in the first place, although momentum investors may argue that point.
These 2 key factors, when combined with the above, provide a holistic view into a particular stock. Further, by joining A+ Investor you can see whether Alaska Air Group, Inc. and LATAM Airlines Group SA (ADR) pass any of our 60+ stock screens that have outperformed the market since their creation.
So, Which Is the Better Investment, Alaska Air Group, Inc. or LATAM Airlines Group SA (ADR) Stock?
Overall, Alaska Air Group, Inc. stock has a Growth Score of 71, Momentum Score of 29 and Quality Score of 71.
LATAM Airlines Group SA (ADR) stock has a Growth Score of 68, Momentum Score of 5 and Quality Score of 61.
Comparing Alaska Air Group, Inc. and LATAM Airlines Group SA (ADR)’s grades, scores and metrics can act as a solid basis to determine whether they may be a good investment or not. You’ll also want to look at your portfolio’s asset allocation as well as your risk tolerance and financial goals to see if either of these stocks would make a good fit for you. AAII can help you figure out which investments align with your individual needs and preferences.
Investors are encouraged to do their own due diligence and research. In this way, individuals can effectively become managers of their own assets‐without having to rely on others for financial independence. You can count on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis.
A+ Investor adds to our qualitative teaching with a powerful data suite to help you whittle down investment choices to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.
AAII Disclaimer
We make no representations or warranties that any investor will, or is likely to, achieve profits similar to those shown, because past, hypothetical or simulated performance is not necessarily indicative of future results. Before making an investment decision, you should consider your circumstances and whether the information on our content is applicable to your situation. This information was prepared in good faith, and we accept no liability for any errors or omissions. The full disclaimer can be read here.
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Publish date : 2024-08-20 04:34:00
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