Contrasting Japan Airlines (OTCMKTS:JAPSY) & SkyWest (NASDAQ:SKYW)

Japan Airlines (OTCMKTS:JAPSY) and SkyWest (NASDAQ:SKYW) are both mid-cap transportation companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, risk, analyst recommendations, dividends, institutional ownership and profitability.

Valuation and Earnings

This table compares Japan Airlines and SkyWest”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Japan Airlines	$12.11 billion	0.76	$706.45 million	$0.92	11.45
SkyWest	$3.53 billion	1.36	$322.96 million	$9.83	12.13

Japan Airlines has higher revenue and earnings than SkyWest. Japan Airlines is trading at a lower price-to-earnings ratio than SkyWest, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

81.3% of SkyWest shares are held by institutional investors. 2.0% of SkyWest shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Risk and Volatility

Japan Airlines has a beta of 0.47, meaning that its stock price is 53% less volatile than the S&P 500. Comparatively, SkyWest has a beta of 1.92, meaning that its stock price is 92% more volatile than the S&P 500.

Profitability

This table compares Japan Airlines and SkyWest’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Japan Airlines	6.35%	12.28%	4.37%
SkyWest	10.62%	16.69%	5.75%

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Japan Airlines	0	0	0	1	4.00
SkyWest	0	0	4	0	3.00

SkyWest has a consensus target price of $126.75, indicating a potential upside of 6.32%. Given SkyWest’s higher probable upside, analysts plainly believe SkyWest is more favorable than Japan Airlines.

Summary

SkyWest beats Japan Airlines on 11 of the 15 factors compared between the two stocks.

About Japan Airlines

Japan Airlines Co., Ltd., together with its subsidiaries, provides scheduled and non-scheduled air transport services in Japan, Asia, Oceania, North America, and Europe. The company operates through Air Transportation and Other segments. It offers passenger, ground handling, cargo and mail handling, and maintenance services. The company is also involved in the aerial work and other related business; airport peripheral business; and sale of travel package tours. As of March 31, 2023, it operated a fleet of 224 aircraft. The company was formerly known as Japan Airlines International Co., Ltd. and changed its name to Japan Airlines Co., Ltd. in April 2011. The company was founded in 1951 and is headquartered in Tokyo, Japan.

About SkyWest

SkyWest, Inc. is the holding company for two scheduled passenger airline operations and an aircraft leasing company. SkyWest’s airline companies provide commercial air service in cities throughout North America with nearly 3,000 daily flights carrying more than 53 million passengers annually. SkyWest Airlines operates through partnerships with United Airlines, Delta Air Lines, American Airlines and Alaska Airlines. ExpressJet Airlines operates through partnerships with United Airlines, Delta Air Lines and American Airlines. Based in St. George, Utah, SkyWest employs nearly 17,000 employees.