Southwest Airlines vs United Airlines Which Outperforms?

Southwest Airlines and United Airlines are two major players in the airline industry, each with its own strengths and weaknesses. Southwest Airlines is known for its strong customer service and low-cost fare model, making it a popular choice among budget-conscious travelers. On the other hand, United Airlines has a larger global presence and offers a wider range of services and amenities. Both companies have seen fluctuations in their stock prices over the years, impacted by factors such as fuel costs, regulatory changes, and market trends. Investors looking to capitalize on the airline industry may find value in comparing Southwest and United Airlines stocks to determine which may be a more lucrative investment opportunity.

Southwest Airlines or United Airlines?

When comparing Southwest Airlines and United 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 Southwest Airlines and United 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. Southwest Airlines has a dividend yield of 2.17%, while United Airlines has a dividend yield of -%. 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 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 Southwest Airlines P/E ratio at -406.22 and United Airlines's P/E ratio at 11.43. 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 1.91 while United Airlines's P/B ratio is 2.76.

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 Airlines's is 0.07%. 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 Airlines's ROE at 27.31%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $33.23 for Southwest Airlines and $95.87 for United Airlines. Over the past year, Southwest Airlines's prices ranged from $23.58 to $36.12, with a yearly change of 53.18%. United Airlines's prices fluctuated between $37.02 and $105.09, with a yearly change of 183.87%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.