Critical Contrast: LATAM Airlines Group (OTCMKTS:LTMAY) and Spirit Airlines (NYSE:SAVE)

LATAM Airlines Group (OTCMKTS:LTMAY) and Spirit Airlines (NYSE:SAVE) are both transportation companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, earnings, risk, valuation, profitability and analyst recommendations.

Analyst Recommendations

This is a breakdown of current ratings for LATAM Airlines Group and Spirit Airlines, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LATAM Airlines Group	0	0	0	0	N/A
Spirit Airlines	4	4	0	0	1.50

Spirit Airlines has a consensus target price of $3.57, indicating a potential downside of 1.88%. Given Spirit Airlines’ higher possible upside, analysts clearly believe Spirit Airlines is more favorable than LATAM Airlines Group.

Risk & Volatility

LATAM Airlines Group has a beta of 3.72, suggesting that its stock price is 272% more volatile than the S&P 500. Comparatively, Spirit Airlines has a beta of 1.4, suggesting that its stock price is 40% more volatile than the S&P 500.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LATAM Airlines Group	$11.64 billion	24.96	$581.83 million	N/A	N/A
Spirit Airlines	$5.28 billion	0.08	-$447.46 million	($4.44)	-0.82

LATAM Airlines Group has higher revenue and earnings than Spirit Airlines.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
LATAM Airlines Group	5.93%	169.16%	5.01%
Spirit Airlines	-9.21%	-34.64%	-4.53%

Insider & Institutional Ownership

58.7% of Spirit Airlines shares are owned by institutional investors. 7.8% of LATAM Airlines Group shares are owned by company insiders. Comparatively, 0.7% of Spirit Airlines shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

LATAM Airlines Group beats Spirit Airlines on 8 of the 10 factors compared between the two stocks.

About LATAM Airlines Group

LATAM Airlines Group S.A., together with its subsidiaries, provides passenger and cargo air transportation services in Chile, Peru, Ecuador, Colombia, Brazil, other Latin American countries, the Caribbean, North America, Europe, and Oceania. It offers other services, such as ground handling, courier, logistics, and maintenance services. As of December 31, 2023, the company provides passenger transport services to 148 destinations in 26 countries and cargo services to 166 destinations in 33 countries; and operated 333 fleet of aircraft. 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.

About Spirit Airlines

Spirit Airlines, Inc. provides airline services. The company also offers hotels and rental cars services. It serves 93 destinations in 15 countries in the United States, Latin America, and the Caribbean. As of December 31, 2023, the company operated a fleet of 205 Airbus single-aisle aircraft. The company was formerly known as Clippert Trucking Company and changed its name to Spirit Airlines, Inc. in 1992. Spirit Airlines, Inc. was incorporated in 1964 and is headquartered in Miramar, Florida.