American Airlines vs Spirit Airlines Which Is Superior?

American Airlines and Spirit Airlines are two prominent players in the airline industry, each with its own unique strengths and challenges. American Airlines, one of the largest airlines in the world, has a long-standing history and brand recognition. On the other hand, Spirit Airlines is known for its ultra-low-cost model and focus on budget-conscious travelers. Both airlines have been affected by the COVID-19 pandemic, but their stocks have responded differently to market conditions. Analyzing the performance of American Airlines vs Spirit Airlines stocks can provide valuable insights for investors looking to navigate the volatility of the airline industry.

American Airlines or Spirit Airlines?

When comparing American Airlines and Spirit 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 Spirit 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 Spirit Airlines has a dividend yield of 30.53%. 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, Spirit 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 American Airlines P/E ratio at 33.49 and Spirit Airlines's P/E ratio at -0.21. 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 Spirit Airlines's P/B ratio is 0.18.

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 Spirit Airlines's is 0.01%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with American Airlines's ROE at -5.42% and Spirit Airlines's ROE at -63.51%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $13.97 for American Airlines and $1.13 for Spirit Airlines. Over the past year, American Airlines's prices ranged from $9.07 to $16.15, with a yearly change of 78.06%. Spirit Airlines's prices fluctuated between $1.13 and $17.02, with a yearly change of 1406.06%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.