Financial Review: Southwest Airlines (LUV) and The Competition

Southwest Airlines (NYSE: LUV) is one of 42 publicly-traded companies in the “TRANSPORT-AIR” industry, but how does it contrast to its competitors? We will compare Southwest Airlines to related companies based on the strength of its analyst recommendations, valuation, earnings, dividends, profitability, institutional ownership and risk.


This table compares Southwest Airlines and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Southwest Airlines 16.48% 23.43% 8.68%
Southwest Airlines Competitors 6.23% 32.46% 5.04%


Southwest Airlines pays an annual dividend of $0.50 per share and has a dividend yield of 0.9%. Southwest Airlines pays out 8.6% of its earnings in the form of a dividend. As a group, “TRANSPORT-AIR” companies pay a dividend yield of 1.6% and pay out 19.4% of their earnings in the form of a dividend. Southwest Airlines has raised its dividend for 6 consecutive years.

Earnings & Valuation

This table compares Southwest Airlines and its competitors revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Southwest Airlines $21.17 billion $3.49 billion 9.79
Southwest Airlines Competitors $13.49 billion $890.16 million 9.88

Southwest Airlines has higher revenue and earnings than its competitors. Southwest Airlines is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Volatility and Risk

Southwest Airlines has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500. Comparatively, Southwest Airlines’ competitors have a beta of 1.17, meaning that their average stock price is 17% more volatile than the S&P 500.

Institutional and Insider Ownership

80.0% of Southwest Airlines shares are owned by institutional investors. Comparatively, 69.7% of shares of all “TRANSPORT-AIR” companies are owned by institutional investors. 0.2% of Southwest Airlines shares are owned by company insiders. Comparatively, 8.7% of shares of all “TRANSPORT-AIR” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Southwest Airlines and its competitors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Southwest Airlines 0 4 13 0 2.76
Southwest Airlines Competitors 368 1513 2301 166 2.52

Southwest Airlines presently has a consensus target price of $70.50, suggesting a potential upside of 23.68%. As a group, “TRANSPORT-AIR” companies have a potential upside of 11.67%. Given Southwest Airlines’ stronger consensus rating and higher possible upside, equities analysts plainly believe Southwest Airlines is more favorable than its competitors.


Southwest Airlines beats its competitors on 10 of the 15 factors compared.

About Southwest Airlines

Southwest Airlines Co. (Southwest) operates Southwest Airlines, a passenger airline that provides scheduled air transportation in the United States and near-international markets. The Company provides point-to-point service. The Company offers ancillary service offerings, such as Southwest’s EarlyBird Check-In and transportation of pets and unaccompanied minors, in accordance with Southwest’s respective policies. Southwest’s Rapid Rewards frequent flyer program enables program members (Members) to earn points for every dollar spent on Southwest fares. Its Internet Website,, is an avenue for Southwest customers to purchase and manage travel online. As of December 31, 2016, Southwest operated a total of 723 Boeing 737 aircraft and served 101 destinations in 40 states, the District of Columbia, the Commonwealth of Puerto Rico, and eight near-international countries: Mexico, Jamaica, The Bahamas, Aruba, Dominican Republic, Costa Rica, Belize, and Cuba.

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