LATAM Airlines Group (LTMAQ) versus Its Competitors Critical Analysis

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LATAM Airlines Group (OTCMKTS: LTMAQ) is one of 28 public companies in the “Air transportation, scheduled” industry, but how does it compare to its peers? We will compare LATAM Airlines Group to similar businesses based on the strength of its analyst recommendations, profitability, valuation, institutional ownership, earnings, risk and dividends. […]

LATAM Airlines Group (OTCMKTS: LTMAQ) is one of 28 public companies in the “Air transportation, scheduled” industry, but how does it compare to its peers? We will compare LATAM Airlines Group to similar businesses based on the strength of its analyst recommendations, profitability, valuation, institutional ownership, earnings, risk and dividends.

Dividends

LATAM Airlines Group pays an annual dividend of $0.09 per share and has a dividend yield of 5.9%. LATAM Airlines Group pays out 29.0% of its earnings in the form of a dividend. As a group, “Air transportation, scheduled” companies pay a dividend yield of 2.8% and pay out 17.8% of their earnings in the form of a dividend.

Analyst Ratings

This is a summary of recent ratings for LATAM Airlines Group and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LATAM Airlines Group 0 0 0 0 N/A
LATAM Airlines Group Competitors 755 1969 2498 201 2.40

As a group, “Air transportation, scheduled” companies have a potential upside of 37.12%. Given LATAM Airlines Group’s peers higher probable upside, analysts plainly believe LATAM Airlines Group has less favorable growth aspects than its peers.

Earnings and Valuation

This table compares LATAM Airlines Group and its peers top-line revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
LATAM Airlines Group $10.07 billion $190.43 million 4.91
LATAM Airlines Group Competitors $14.90 billion $744.27 million 6.60

LATAM Airlines Group’s peers have higher revenue and earnings than LATAM Airlines Group. LATAM Airlines Group is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares LATAM Airlines Group and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
LATAM Airlines Group -33.47% -45.13% -3.11%
LATAM Airlines Group Competitors -11.40% -36.74% -1.39%

Institutional & Insider Ownership

2.2% of LATAM Airlines Group shares are held by institutional investors. Comparatively, 67.8% of shares of all “Air transportation, scheduled” companies are held by institutional investors. 7.8% of LATAM Airlines Group shares are held by company insiders. Comparatively, 4.0% of shares of all “Air transportation, scheduled” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

LATAM Airlines Group peers beat LATAM Airlines Group on 9 of the 11 factors compared.

LATAM Airlines Group Company Profile

LATAM Airlines Group S.A., together with its subsidiaries, provides passenger and cargo air transportation services in Peru, Argentina, the United States, Europe, Colombia, Brazil, Ecuador, Chile, the Asia Pacific, and rest of Latin America. The company provides passenger transport services to approximately 145 destinations in 26 countries, as well as cargo services to approximately 151 destinations in 29 countries; and operates loyalty programs. As of December 31, 2019, it operated a fleet of 331 aircraft, which include 320 passenger aircraft and 11 cargo aircraft; and subleased 11 aircraft comprising 10 passenger aircraft and 1 cargo aircraft to third parties. The company was formerly known as LAN Airlines S.A. and changed its name to LATAM Airlines Group S.A. in June 2012. LATAM Airlines Group S.A. was founded in 1929 and is headquartered in Santiago, Chile. On May 26, 2020, LATAM Airlines Group S.A., along with its affiliates, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of New York.

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