Air Canada vs United Airlines Which Should You Buy?

Air Canada and United Airlines are two major players in the airline industry with their respective stocks being closely watched by investors. Both airlines have faced challenges in recent years, including the impact of the COVID-19 pandemic on air travel demand. While Air Canada has experienced fluctuations in its stock price due to the pandemic, United Airlines has also seen volatility in its stock performance. Investors continue to monitor these stocks closely as they navigate the shifting landscape of the airline industry.

Air Canada or United Airlines?

When comparing Air Canada and United Airlines, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Air Canada and United Airlines.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Air Canada has a dividend yield of -%, while United Airlines has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Air Canada reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. On the other hand, United Airlines reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Air Canada P/E ratio at 3.57 and United Airlines's P/E ratio at 11.43. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Air Canada P/B ratio is 2.94 while United Airlines's P/B ratio is 2.76.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Air Canada has seen a 5-year revenue growth of -0.14%, while United Airlines's is 0.07%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Air Canada's ROE at 177.01% and United Airlines's ROE at 27.31%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $17.61 for Air Canada and $95.87 for United Airlines. Over the past year, Air Canada's prices ranged from $10.16 to $18.56, with a yearly change of 82.68%. United Airlines's prices fluctuated between $37.02 and $105.09, with a yearly change of 183.87%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.