Air China (OTCMKTS:AIRYY – Get Free Report) and United Airlines (NASDAQ:UAL – Get Free Report) are both large-cap transportation companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, risk, institutional ownership, valuation, analyst recommendations and dividends.
Analyst Ratings
This is a breakdown of recent recommendations and price targets for Air China and United Airlines, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Air China | 0 | 0 | 0 | 0 | 0.00 |
| United Airlines | 0 | 2 | 15 | 0 | 2.88 |
United Airlines has a consensus target price of $135.97, suggesting a potential upside of 32.89%. Given United Airlines’ stronger consensus rating and higher probable upside, analysts plainly believe United Airlines is more favorable than Air China.
Earnings and Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Air China | $23.19 billion | 0.69 | -$32.35 million | $0.02 | 911.00 |
| United Airlines | $59.07 billion | 0.56 | $3.35 billion | $10.22 | 10.01 |
United Airlines has higher revenue and earnings than Air China. United Airlines is trading at a lower price-to-earnings ratio than Air China, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Air China has a beta of -0.08, meaning that its share price is 108% less volatile than the S&P 500. Comparatively, United Airlines has a beta of 1.31, meaning that its share price is 31% more volatile than the S&P 500.
Institutional and Insider Ownership
69.7% of United Airlines shares are held by institutional investors. 0.7% of United Airlines shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Profitability
This table compares Air China and United Airlines’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Air China | 0.19% | 0.79% | 0.09% |
| United Airlines | 5.68% | 25.13% | 4.56% |
Summary
United Airlines beats Air China on 12 of the 14 factors compared between the two stocks.
About Air China
Air China Limited, together with its subsidiaries, provides air passenger, air cargo, and airline-related services in Mainland China, Hong Kong, Macau, Taiwan, China, and internationally. The company operates in Airline Operations and Other Operations segments. It provides aircraft engineering and airport ground handling services. The company is also involved in the import and export trading activities; and provision of cabin, airline catering, air ticketing, human resources, aircraft overhaul and maintenance, and financial services. Air China Limited was founded in 1988 and is headquartered in Beijing, the People's Republic of China.
About United Airlines
United Airlines Holdings, Inc., through its subsidiaries, provides air transportation services in North America, Asia, Europe, Africa, the Pacific, the Middle East, and Latin America. The company transports people and cargo through its mainline and regional fleets. It also offers catering, ground handling, flight academy, and maintenance services for third parties. The company was formerly known as United Continental Holdings, Inc. and changed its name to United Airlines Holdings, Inc. in June 2019. United Airlines Holdings, Inc. was incorporated in 1968 and is headquartered in Chicago, Illinois.
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