American Airlines vs LATAM Airlines Which Is a Better Investment?

American Airlines and LATAM Airlines are two major players in the aviation industry, each operating on different continents but facing similar challenges. American Airlines, based in the United States, has a strong presence in North America and operates a vast network of domestic and international flights. On the other hand, LATAM Airlines, based in South America, is a leading carrier in the region with a significant market share. Both stocks have seen fluctuations in recent years due to various factors such as fuel prices, competition, and global economic conditions. In this analysis, we will compare and contrast the performance of American Airlines and LATAM Airlines stocks to determine which may be a more attractive investment option for investors.

American Airlines or LATAM Airlines?

When comparing American Airlines and LATAM 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 American Airlines and LATAM 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. American Airlines has a dividend yield of -%, while LATAM Airlines has a dividend yield of 1180.4%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. American Airlines reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. On the other hand, LATAM Airlines reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.04%.

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 American Airlines P/E ratio at 41.21 and LATAM Airlines's P/E ratio at 42.15. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. American Airlines P/B ratio is -2.33 while LATAM Airlines's P/B ratio is 50.48.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, American Airlines has seen a 5-year revenue growth of -0.16%, while LATAM Airlines's is -0.98%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with American Airlines's ROE at -5.42% and LATAM Airlines's ROE at 164.26%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $17.23 for American Airlines and $0.04 for LATAM Airlines. Over the past year, American Airlines's prices ranged from $9.07 to $18.20, with a yearly change of 100.66%. LATAM Airlines's prices fluctuated between $0.04 and $1598.00, with a yearly change of 3759900.00%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.