American Airlines vs Alaska Air Which Is a Smarter Choice?

American Airlines and Alaska Air are two prominent players in the competitive airline industry. Both companies have faced their share of challenges in recent years, including the impact of the global pandemic on travel demand. Investors are closely monitoring the performance of American Airlines and Alaska Air stocks, analyzing factors such as financial health, market share, and strategic initiatives. This comparison will delve into the strengths and weaknesses of each company, providing valuable insights for potential investors.

American Airlines or Alaska Air?

When comparing American Airlines and Alaska Air, 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 Alaska Air.

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 Alaska Air has a dividend yield of -%. 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, Alaska Air 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 American Airlines P/E ratio at 33.49 and Alaska Air's P/E ratio at 20.25. 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 -1.90 while Alaska Air's P/B ratio is 1.46.

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 Alaska Air's is 0.21%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with American Airlines's ROE at -5.42% and Alaska Air's ROE at 7.67%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $13.97 for American Airlines and $51.26 for Alaska Air. Over the past year, American Airlines's prices ranged from $9.07 to $16.15, with a yearly change of 78.06%. Alaska Air's prices fluctuated between $32.00 and $52.55, with a yearly change of 64.22%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.