Japan Airlines vs American Airlines Which Is a Better Investment?

Japan Airlines and American Airlines are two major players in the global aviation industry, both with significant impacts on the stock market. Japan Airlines is the flag carrier of Japan and one of the largest airlines in Asia, while American Airlines is one of the largest in the world. Both airlines have faced challenges in recent years, including economic downturns and the impact of the COVID-19 pandemic. Investors closely monitor the performance of these stocks to gauge the health of the airline industry as a whole.

Japan Airlines or American Airlines?

When comparing Japan Airlines 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 Japan Airlines 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. Japan Airlines has a dividend yield of -%, while American Airlines has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Japan Airlines reports a 5-year dividend growth of 0.00% year and a payout ratio of 37.52%. 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 Japan Airlines P/E ratio at 6.45 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. Japan Airlines P/B ratio is 0.61 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, Japan Airlines has seen a 5-year revenue growth of 0.61%, while American Airlines's is -0.16%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Japan Airlines's ROE at 9.66% 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 $8.30 for Japan Airlines and $16.81 for American Airlines. Over the past year, Japan Airlines's prices ranged from $7.27 to $10.17, with a yearly change of 39.89%. 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.