Spirit Airlines vs American Airlines Which Performs Better?

Spirit Airlines and American Airlines are two major players in the airline industry, each offering unique benefits and challenges for investors. Spirit Airlines is known for its low-cost model and budget-friendly fares, appealing to budget-conscious travelers. On the other hand, American Airlines is a legacy carrier with a more diverse route network and premium services. Both stocks have experienced volatility in recent years due to changing market conditions and industry competition, making them interesting choices for investors looking to diversify their portfolio.

Spirit Airlines or American Airlines?

When comparing Spirit 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 Spirit 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. Spirit Airlines has a dividend yield of 11.76%, while American Airlines has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Spirit Airlines reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. 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 Spirit Airlines P/E ratio at -0.55 and American Airlines's P/E ratio at 33.85. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Spirit Airlines P/B ratio is 0.46 while American Airlines's P/B ratio is -1.92.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Spirit Airlines has seen a 5-year revenue growth of 0.01%, while American Airlines's is -0.16%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Spirit Airlines's ROE at -63.51% 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 $2.67 for Spirit Airlines and $13.89 for American Airlines. Over the past year, Spirit Airlines's prices ranged from $1.40 to $17.02, with a yearly change of 1115.71%. 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.