FedEx vs American Airlines Which Offers More Value?

Both FedEx and American Airlines are prominent players in the transportation industry, but their stocks have followed different trajectories in recent years. FedEx, a global leader in logistics and delivery services, has experienced steady growth in revenue and profitability. Meanwhile, American Airlines, one of the largest airlines in the world, has faced challenges due to fluctuating fuel prices and industry competition. Investors will need to consider these factors when evaluating the potential for both companies' stocks in the market.

FedEx or American Airlines?

When comparing FedEx 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 FedEx 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. FedEx has a dividend yield of 2.26%, while American Airlines has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. FedEx reports a 5-year dividend growth of 15.01% year and a payout ratio of 31.63%. 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 FedEx P/E ratio at 17.75 and American Airlines's P/E ratio at 34.40. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. FedEx P/B ratio is 2.64 while American Airlines's P/B ratio is -1.95.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, FedEx has seen a 5-year revenue growth of 0.45%, while American Airlines's is -0.16%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with FedEx's ROE at 15.00% 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 $290.95 for FedEx and $14.05 for American Airlines. Over the past year, FedEx's prices ranged from $234.45 to $313.84, with a yearly change of 33.86%. American Airlines's prices fluctuated between $9.07 and $16.15, with a yearly change of 78.06%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.