SkyWest (SKYW) & Spirit Airlines (SAVE) Financial Analysis

SkyWest (NASDAQ: SKYW) and Spirit Airlines (NASDAQ:SAVE) are both mid-cap 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.

Earnings and Valuation

This table compares SkyWest and Spirit Airlines’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
SkyWest $3.12 billion 0.76 -$161.58 million ($2.61) -17.59
Spirit Airlines $2.32 billion 1.07 $264.87 million $3.15 11.37

Spirit Airlines has higher revenue, but lower earnings than SkyWest. SkyWest is trading at a lower price-to-earnings ratio than Spirit Airlines, 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, 95.4% of Spirit Airlines shares are held by institutional investors. 3.5% of SkyWest shares are held by insiders. Comparatively, 0.3% of Spirit Airlines 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 Spirit Airlines’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SkyWest -4.15% 11.87% 3.18%
Spirit Airlines 8.55% 15.86% 6.62%

Dividends

SkyWest pays an annual dividend of $0.32 per share and has a dividend yield of 0.7%. Spirit Airlines does not pay a dividend. SkyWest pays out -12.3% of its earnings in the form of a dividend.

Volatility and Risk

SkyWest has a beta of 1.74, indicating that its share price is 74% more volatile than the S&P 500. Comparatively, Spirit Airlines has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500.

Analyst Recommendations

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SkyWest 0 2 2 1 2.80
Spirit Airlines 1 8 3 0 2.17

SkyWest presently has a consensus target price of $47.75, suggesting a potential upside of 4.03%. Spirit Airlines has a consensus target price of $41.00, suggesting a potential upside of 14.46%. Given Spirit Airlines’ higher possible upside, analysts clearly believe Spirit Airlines is more favorable than SkyWest.

Summary

Spirit Airlines beats SkyWest on 9 of the 17 factors compared between the two stocks.

About SkyWest

SkyWest, Inc., through its subsidiaries, SkyWest Airlines, Inc. (SkyWest Airlines) and ExpressJet Airlines, Inc. (ExpressJet), operates regional airline operations in the United States. The Company’s segments include SkyWest Airlines, ExpressJet and SkyWest Leasing. The SkyWest Airlines segment provides regional jet service to airports primarily located in the Midwestern and Western United States, as well as Mexico and Canada. The ExpressJet segment provides regional jet service to airports primarily located in the Eastern and Midwestern United States, as well as Mexico, Canada and the Caribbean. The SkyWest Leasing segment includes its E175 aircraft ownership business. As of December 31, 2016, the Company offered scheduled passenger service with approximately 3,160 daily departures to destinations in the United States, Canada, Mexico and the Caribbean. The Company’s flights are operated as Delta Connection, United Express, American Eagle or Alaska Airlines.

About Spirit Airlines

Spirit Airlines, Inc. is an airline company. The Company provides air transportation for passengers. As of December 31, 2016, its all-Airbus Fit Fleet operated over 420 daily flights to 59 destinations in the United States, Caribbean and Latin America. As of December 31, 2016, it had a fleet of 95 Airbus single-aisle aircraft, which are referred to as A320 family aircraft and include the A319, A320 and A321 models, which have common design and equipment but differ most notably in fuselage length, service range and seat capacity. As of December 31, 2016, its fleet consisted of 29 A319s, 45 A320ceos, five A320neos and 16 A321ceos. Its Bare Fares offerings are unbundled base fares that remove components included in the price of an airline ticket. It also offers Frill Control, which allows customers to pay only for the options they choose, such as bags, advance seat assignments and refreshments. As of December 31, 2016, its route network included 200 markets served by 59 airports.

Receive News & Ratings for SkyWest Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for SkyWest Inc. and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply