Southwest Airlines vs UNITED Which Is More Lucrative?

Southwest Airlines and United Airlines are two major players in the airline industry, each with its own unique strengths and challenges. Southwest Airlines is known for its low-cost business model, strong customer service, and consistent profitability. On the other hand, United Airlines has a larger international presence, a diverse fleet of aircraft, but has faced numerous challenges in recent years. Both stocks have seen fluctuations in recent years due to various factors such as fuel costs, competition, and global events. It is important for investors to carefully consider the financial health and performance of each company before making any investment decisions.

Southwest Airlines or UNITED?

When comparing Southwest 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 Southwest 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. Southwest Airlines has a dividend yield of 2.18%, while UNITED has a dividend yield of 3.0%. 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 -879.59%. 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 Southwest Airlines P/E ratio at -403.65 and UNITED's P/E ratio at 51.38. 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 1.90 while UNITED's P/B ratio is 1.40.

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 UNITED's is -0.46%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Southwest Airlines's ROE at -0.47% and UNITED's ROE at 2.56%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $32.85 for Southwest Airlines and ¥798.00 for UNITED. Over the past year, Southwest Airlines's prices ranged from $23.58 to $36.12, with a yearly change of 53.18%. 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.