Delta vs American Airlines Which Is Superior?

Delta Air Lines and American Airlines are two of the largest airline companies in the United States, competing for market share and investor attention. Both companies have faced challenges due to the COVID-19 pandemic, leading to volatility in their stock prices. While Delta has focused on cost-cutting measures and expansion into new markets, American Airlines has implemented strategies to boost revenue and improve customer satisfaction. Investors are closely watching how these airlines navigate the current economic landscape to determine which stock may be a better investment opportunity.

Delta or American Airlines?

When comparing Delta and American 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 Delta and American 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. Delta has a dividend yield of 1.03%, while American Airlines has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Delta reports a 5-year dividend growth of 4.56% year and a payout ratio of 0.00%. On the other hand, American 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 Delta P/E ratio at 20.82 and American Airlines's P/E ratio at 40.45. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Delta P/B ratio is 1.27 while American Airlines's P/B ratio is -2.29.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Delta has seen a 5-year revenue growth of 0.17%, while American Airlines's is -0.16%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Delta's ROE at 6.26% and American Airlines's ROE at -5.42%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ₹120.10 for Delta and $16.81 for American Airlines. Over the past year, Delta's prices ranged from ₹104.45 to ₹159.80, with a yearly change of 52.99%. American Airlines's prices fluctuated between $9.07 and $18.20, with a yearly change of 100.66%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.