China Eastern Airlines (OTCMKTS: CPCAY) and CATHAY Pac AIRW/S (OTCMKTS:CPCAY) are both mid-cap transportation companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, profitability, institutional ownership, earnings, risk and analyst recommendations.

Dividends

China Eastern Airlines pays an annual dividend of $0.36 per share and has a dividend yield of 1.2%. CATHAY Pac AIRW/S pays an annual dividend of $0.11 per share and has a dividend yield of 1.6%. China Eastern Airlines pays out 11.0% of its earnings in the form of a dividend. CATHAY Pac AIRW/S pays out -52.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. CATHAY Pac AIRW/S is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

0.4% of China Eastern Airlines shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations and price targets for China Eastern Airlines and CATHAY Pac AIRW/S, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
China Eastern Airlines 0 2 2 0 2.50
CATHAY Pac AIRW/S 0 0 1 0 3.00

Profitability

This table compares China Eastern Airlines and CATHAY Pac AIRW/S’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
China Eastern Airlines 3.91% 7.21% 1.86%
CATHAY Pac AIRW/S N/A N/A N/A

Earnings & Valuation

This table compares China Eastern Airlines and CATHAY Pac AIRW/S’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
China Eastern Airlines $15.17 billion 0.57 $938.61 million $3.26 9.17
CATHAY Pac AIRW/S $12.48 billion 0.44 -$161.00 million ($0.21) -33.58

China Eastern Airlines has higher revenue and earnings than CATHAY Pac AIRW/S. CATHAY Pac AIRW/S is trading at a lower price-to-earnings ratio than China Eastern Airlines, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

China Eastern Airlines has a beta of 1.62, suggesting that its stock price is 62% more volatile than the S&P 500. Comparatively, CATHAY Pac AIRW/S has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500.

Summary

China Eastern Airlines beats CATHAY Pac AIRW/S on 11 of the 14 factors compared between the two stocks.

About China Eastern Airlines

China Eastern Airlines Corporation Limited, together with its subsidiaries, operates in the civil aviation industry in the People's Republic of China and internationally. The company offers passenger, cargo, mail delivery, ground, cargo handling, tour operations, air catering, and other extended transportation services. It is also involved in flight training; airline maintenance and consultation; import and export, investment, leasing, and consultation; hotel services; travel and air ticketing agency and transportation; the research and development of technology and products in the field of aviation; and e-commerce platform activities. As of December 31, 2017, the company operated a fleet of 637 aircraft, including 627 passenger aircraft and 10 business aircraft. China Eastern Airlines Corporation Limited was founded in 1988 and is headquartered in Shanghai, the People's Republic of China. China Eastern Airlines Corporation Limited is a subsidiary of China Eastern Air Holding Company Limited.

About CATHAY Pac AIRW/S

Cathay Pacific Airways Limited, together with its subsidiaries, operates as an airline that provides scheduled passenger and cargo services to approximately 200 destinations in Asia, North America, Australia, Europe, and Africa. It operates in two segments, Airline Business and Non-Airline Business. The company conducts airline operations principally to and from Hong Kong. It also offers airline catering, ground handling, aircraft ramp handling, aircraft engineering, property investment, financial, computer network for interchange of air cargo related information, information processing, laundry and dry cleaning, and food processing and catering services, as well as provides travel reward programs. In addition, the company operates as a travel tour operator and as an aircraft leasing facilitator; and cargo terminals. It operates a fleet of approximately 200 aircraft. The company was founded in 1946 and is headquartered in Lantau, Hong Kong.

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