Financial Review: Ryanair (NASDAQ:RYAAY) & Air China (OTCMKTS:AIRYY)

Ryanair (NASDAQ:RYAAY) and Air China (OTCMKTS:AIRYY) are both large-cap transportation companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, profitability, risk, earnings and dividends.

Volatility and Risk

Ryanair has a beta of 1.26, indicating that its share price is 26% more volatile than the S&P 500. Comparatively, Air China has a beta of 0.04, indicating that its share price is 96% less volatile than the S&P 500.

Institutional & Insider Ownership

43.7% of Ryanair shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Ryanair and Air China’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ryanair	15.04%	29.76%	14.14%
Air China	-1.05%	-4.56%	-0.52%

Earnings and Valuation

This table compares Ryanair and Air China”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ryanair	$14.98 billion	2.16	$1.73 billion	$4.98	12.46
Air China	$23.86 billion	0.44	-$248.73 million	($0.30)	-40.08

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

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Ryanair and Air China, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ryanair	0	4	7	1	2.75
Air China	1	0	0	0	1.00

Ryanair currently has a consensus price target of $75.67, suggesting a potential upside of 21.98%. Given Ryanair’s stronger consensus rating and higher possible upside, analysts clearly believe Ryanair is more favorable than Air China.

Summary

Ryanair beats Air China on 13 of the 14 factors compared between the two stocks.

About Ryanair

Ryanair Holdings plc, together with its subsidiaries, provides scheduled-passenger airline services in Ireland, the United Kingdom, Italy, Spain, and internationally. It is also involved in the provision of various ancillary services, such as non-flight scheduled and Internet-related services, as well as in-flight sale of beverages, food, duty-free, and merchandise; and markets car hire, travel insurance, and accommodation services through its website and mobile app. In addition, the company offers aircraft and passenger handling, ticketing, and maintenance and repair services; and markets car parking, fast-track, airport transfers, attractions, and activities on its website and mobile app, as well as sells gift vouchers. Ryanair Holdings plc was incorporated in 1996 and is headquartered in Swords, Ireland.

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.