American Airlines vs UNITED Which Should You Buy?

Investors looking for opportunities in the airline industry often compare two major players: American Airlines and United Airlines. American Airlines, a legacy carrier, has a long-standing reputation in the industry and a wide network of routes. On the other hand, United Airlines is known for its innovative fleet upgrades and focus on customer service. Both companies have faced challenges in recent years, but their stocks remain popular choices for investors seeking exposure to the aviation sector.

American Airlines or UNITED?

When comparing American Airlines and UNITED, 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 UNITED.

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 UNITED has a dividend yield of 3.03%. 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, UNITED reports a 5-year dividend growth of 6.43% 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 41.81 and UNITED's P/E ratio at 51.06. 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 -2.37 while UNITED's P/B ratio is 1.39.

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 UNITED's is -0.46%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with American Airlines's ROE at -5.42% and UNITED's ROE at 2.56%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $17.37 for American Airlines and ¥789.00 for UNITED. Over the past year, American Airlines's prices ranged from $9.07 to $18.20, with a yearly change of 100.72%. UNITED's prices fluctuated between ¥670.00 and ¥953.00, with a yearly change of 42.24%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.