United Airlines vs Southwest Airlines Which Outperforms?

United Airlines and Southwest Airlines are two of the biggest players in the airline industry, known for their extensive networks, quality service, and strong brand reputations. As publicly traded companies, their stocks are closely followed by investors and analysts alike. United Airlines has faced challenges in recent years, including financial turbulence and negative publicity, while Southwest Airlines has maintained a more positive image and steady growth. This comparison of their stocks will delve into their financial performance, market trends, and potential investment opportunities.

United Airlines or Southwest Airlines?

When comparing United 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 United 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. United Airlines has a dividend yield of -%, while Southwest Airlines has a dividend yield of 2.76%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. United 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 -897.92%.

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 United Airlines P/E ratio at 10.65 and Southwest Airlines's P/E ratio at -406.76. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. United Airlines P/B ratio is 2.57 while Southwest Airlines's P/B ratio is 1.88.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, United Airlines has seen a 5-year revenue growth of 0.07%, while Southwest Airlines's is 0.14%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with United Airlines's ROE at 27.31% and Southwest Airlines's ROE at -0.46%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $87.34 for United Airlines and $31.73 for Southwest Airlines. Over the past year, United Airlines's prices ranged from $37.02 to $89.60, with a yearly change of 142.03%. Southwest Airlines's prices fluctuated between $22.58 and $35.18, with a yearly change of 55.80%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.