Reviewing Controladora Vuela Compania de Aviacion (NYSE:VLRS) & Air China (OTCMKTS:AIRYY)

Controladora Vuela Compania de Aviacion (NYSE:VLRS) and Air China (OTCMKTS:AIRYY) are both transportation companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, dividends, analyst recommendations, valuation, profitability, risk and institutional ownership.

Profitability

This table compares Controladora Vuela Compania de Aviacion and Air China’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Controladora Vuela Compania de Aviacion	-3.42%	-38.03%	-1.84%
Air China	-1.05%	-4.56%	-0.52%

Risk and Volatility

Controladora Vuela Compania de Aviacion has a beta of 1.92, suggesting that its share price is 92% more volatile than the S&P 500. Comparatively, Air China has a beta of 0.04, suggesting that its share price is 96% less volatile than the S&P 500.

Insider and Institutional Ownership

53.3% of Controladora Vuela Compania de Aviacion shares are held by institutional investors. 2.5% of Controladora Vuela Compania de Aviacion shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Controladora Vuela Compania de Aviacion and Air China”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Controladora Vuela Compania de Aviacion	$3.04 billion	0.31	-$104.00 million	($0.89)	-9.14
Air China	$23.86 billion	0.44	-$248.73 million	($0.30)	-40.08

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Controladora Vuela Compania de Aviacion and Air China, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Controladora Vuela Compania de Aviacion	1	6	5	0	2.33
Air China	1	0	0	0	1.00

Controladora Vuela Compania de Aviacion presently has a consensus target price of $8.63, suggesting a potential upside of 6.16%. Given Controladora Vuela Compania de Aviacion’s stronger consensus rating and higher probable upside, analysts plainly believe Controladora Vuela Compania de Aviacion is more favorable than Air China.

Summary

Controladora Vuela Compania de Aviacion beats Air China on 8 of the 14 factors compared between the two stocks.

About Controladora Vuela Compania de Aviacion

Controladora Vuela Compañía de Aviación, S.A.B. de C.V., through its subsidiary, Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V., provides air transportation services for passengers, cargo, and mail in Mexico and internationally. The company operates approximately 590 daily flights on routes connecting 43 cities in Mexico, 22 cities in the United States, 4 cities in Central America, and 2 cities in South America. As of December 31, 2022, it leased 116 aircrafts and 23 spare engines. The company also offers merchandising, travel agency, and loyalty program, as well as specialized and aeronautical technical services. Controladora Vuela Compañía de Aviación, S.A.B. de C.V. was incorporated in 2005 and is headquartered in Mexico City, Mexico.

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.