Spirit Airlines vs Southwest Airlines Which Offers More Value?

Spirit Airlines and Southwest Airlines are two major players in the airline industry, each offering unique investment opportunities. Spirit Airlines, known for its ultra-low-cost model, has been growing steadily in recent years by attracting budget-conscious travelers. On the other hand, Southwest Airlines has built a strong reputation for its customer service and operational efficiency. Investors looking to diversify their portfolio in the airline sector may find these two stocks appealing due to their different business models and growth prospects.

Spirit Airlines or Southwest Airlines?

When comparing Spirit Airlines and Southwest 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 Southwest 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 27.78%, while Southwest Airlines has a dividend yield of 2.17%. 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, Southwest Airlines reports a 5-year dividend growth of 0.00% year and a payout ratio of -879.59%.

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 -0.17 and Southwest Airlines's P/E ratio at -406.22. 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 0.15 while Southwest Airlines's P/B ratio is 1.91.

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 Southwest Airlines's is 0.14%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Spirit Airlines's ROE at -63.51% and Southwest Airlines's ROE at -0.47%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $1.03 for Spirit Airlines and $33.23 for Southwest Airlines. Over the past year, Spirit Airlines's prices ranged from $0.01 to $17.02, with a yearly change of 170050.00%. Southwest Airlines's prices fluctuated between $23.58 and $36.12, with a yearly change of 53.18%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.