Southwest Airlines vs Delta Which Is More Profitable?

Southwest Airlines and Delta Air Lines are two major players in the airline industry, but they have distinct differences when it comes to their stocks. Southwest Airlines (LUV) is known for its low-cost model and strong customer service reputation, while Delta (DAL) has a more diversified international presence and premium offerings. Investors must consider factors such as fuel prices, competition, and industry trends when evaluating the potential growth and stability of these two airline stocks.

Southwest Airlines or Delta?

When comparing Southwest Airlines and Delta, 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 Southwest Airlines and Delta.

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. Southwest Airlines has a dividend yield of 2.81%, while Delta has a dividend yield of 1.03%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Southwest Airlines reports a 5-year dividend growth of 0.00% year and a payout ratio of -897.92%. On the other hand, Delta reports a 5-year dividend growth of 4.56% 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 Southwest Airlines P/E ratio at -399.04 and Delta's P/E ratio at 20.90. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Southwest Airlines P/B ratio is 1.84 while Delta's P/B ratio is 1.28.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Southwest Airlines has seen a 5-year revenue growth of 0.14%, while Delta's is 0.17%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Southwest Airlines's ROE at -0.46% and Delta's ROE at 6.26%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $31.55 for Southwest Airlines and ₹120.01 for Delta. Over the past year, Southwest Airlines's prices ranged from $23.46 to $35.18, with a yearly change of 49.96%. Delta's prices fluctuated between ₹104.45 and ₹159.80, with a yearly change of 52.99%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.